True diversification

 jun25

True diversification key to boosting gaming competitiveness, scholar says

 Yuki Lei, MDT Friday, June 6, 2025 - 1 week ago No Comments 8,730 Views

The government has prioritized developing non-gaming sectors to diversify the economy; however, Zeng Zhonglu, chairman of the Asia Pacific Association for Gambling Studies, argues that true diversification should enhance the gambling industry’s competitiveness, especially as countries such as Thailand move toward legalizing casinos.

While the Macau government continues to promote non-gaming development, Zeng believes this effort should not come at the expense of the gambling industry.

“If we are discussing non-gaming attractions, such development should be appropriate, given Macau’s limited size and resources. Over-investing in other sectors could hurt the core gambling industry and, by extension, the economy. Diversification efforts should strengthen – not weaken – the industry,” he told the Times in an interview.

Thailand’s gambling legalization bill has passed its first round of parliamentary reviews. If approved by the government and fully deliberated in parliament, Thailand would join Malaysia, the Philippines, Cambodia, Singapore, Vietnam, Myanmar, and Laos as the eighth Southeast Asian country to legalize gambling.

Meanwhile, Osaka’s integrated resort is set to open as early as autumn 2030.

Amid these developments, Ed Bowers, president of Global Development at MGM Resorts, announced plans to invest HKD23.1 billion to HKD38.5 billion in a Bangkok casino resort. Lawrence Ho, chairman and CEO of Melco Resorts & Entertainment, is also exploring investment in Thailand.

In 2023, Galaxy Entertainment Group (GEG) opened new offices in Japan and South Korea and plans to open one in Thailand to attract high-value international tourists.

“One key issue facing Macau is international competition,” Zeng said.

He pointed out that countries with established gambling industries are ramping up investment. “Singapore, for instance, is encouraging major operators to expand significantly, while countries like Japan are preparing large-scale casino venues by 2030,” he said.

Among emerging competitors, Thailand poses a particularly strong challenge, Zeng noted, as travel interest from neighboring countries and mainland China continues to rise. “Several Macau gaming operators have shown strong interest in Thailand’s market and are preparing to enter,” he said. “If legalization proceeds, Macau will face increased pressure on its international standing.”

Zeng urged Macau to deepen research into emerging markets and seek stronger support from the central government. “If the gaming sector doesn’t innovate and evolve, Macau’s competitiveness could suffer – long before meaningful diversification is achieved,” he warned.

He cited his research, noting that while the non-gaming share of concessionaire revenue has increased, this is largely due to declining gaming revenue rather than actual growth in non-gaming income. “In absolute terms, non-gaming revenue remains below 2019 levels,” he said. “Most efforts are focused on tourism-related entertainment, like concerts, which offer limited profitability and often require subsidies.”

Zeng recommended boosting investment in high-tech sectors, particularly software and artificial intelligence (AI). He emphasized the urgency for enterprises to explore opportunities in fast-growing digital industries.

Government fiscal data shows that gambling accounts for approximately 76% of Macau’s revenue, which Zeng described as a “crucial” yet fragile dependency.

“Although we talk about diversification, the necessary funding still comes from the gaming sector,” he said. “At present, no other industry can provide comparable fiscal returns.”

He believes Macau’s economic structure is unlikely to shift dramatically in the short term. “Even with the new gaming law, fundamental changes may not happen for at least another seven years,” he said.

Commenting on the government’s recent downward revision of its gross gaming revenue (GGR) forecast to MOP 228 billion, Zeng said the adjustment is more realistic. “The previous estimate of MOP 240 billion was overly optimistic,” he said. “With China’s economy still facing major headwinds, spending from mainland visitors is bound to be lower.”

Regarding the impact of satellite casinos shutting down, Zeng said the effect “will not be particularly significant,” adding, “They’re not disappearing, they’re just relocating under their respective concessionaires.”

https://macaudailytimes.com.mo/true-diversification-key-to-boosting-gaming-competitiveness-scholar-says.html