Gross gaming revenue (GGR) could be even further from returning to pre-Covid-19 pandemic levels than hoped, according to Professor Zeng Zhonglu of Macao Polytechnic University’s Center for Gaming and Tourism Studies.
Speaking to Asia Gaming Brief at the recent G2E Asia conference, Zeng outlined a number of reasons for his pessimism. The first was the mainland’s weakening economy and the impact it had on consumer spending. The trend is bad for Macao given its casinos’ overwhelming reliance on visitors from the mainland.
Zeng pointed to per-person spending reductions and poor retail sales as evidence that the impact was already being felt.
[See more: Ng Wai Han has been appointed as the new head of Macao’s gaming regulator]
While tourist numbers have been booming, their willingness to spend is down. “Macao cannot rely solely on visitor numbers. Without improving the quality – particularly the spending capacity – of its tourists, the gaming industry will struggle to meet government revenue targets,” Zeng told Asia Gaming Brief.
He also noted that Macao’s visitor base had changed significantly since before the pandemic. “We are seeing an increase in elderly travellers and those under 15, while the most economically productive age groups – particularly those aged 25 to 34 and 45 to 54 – are declining,” he said.
[See more: Macao government faces revenue shortfall amid slower gaming growth]
Zeng described the demographic shift as a group “not favourable for gaming or retail consumption.” According to Asia Gaming Brief, visitors from the 25 to 34 age group fell by more than a quarter between 2019 and 2024, while the 45 to 54 age group fell by 21.2 percent.
Regulatory pressures in the form of, for example, criminalisation of cross-border gambling were also taking a toll, as was the demise of the junket era. Finally, Zeng pointed to increasing competition in the likes of Japan, which is set to launch casino operations in 2030.
“For travellers from northern China, Japan is not only closer than Macau but also offers diversified attractions such as shopping, dining, and cultural experiences,” he told the casino news website.
First quarter GGR in the SAR failed to meet the government’s monthly average target of 20 billion patacas, prompting Chief Executive Sam Hou Fai to warn that a budget deficit for 2025 could be on the cards.
