Macau’s Hardships Continue, Despite New Plans to Reinvigorate the Economy (Part II)

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Posted: June 4, 2015

Updated: June 4, 2015

In Part I
GamingZion took a look at the current developments surrounding the prominent gaming hub of Macau, and in Part II we will explore more of that story.

Junkets are the problem for Macau’s financial downturn in recent times, mobile casinos report. Through them, high rollers would borrow money so they would have the means to finance their gambling pursuits. However, after a long period of aggressive and unregulated lending practices, the junkets succumbed to defeat. In order to battle the negative performance in the casino market, some in Macau would like to introduce more services pertaining to the tourism industry.


• Macau wants to shift focus more towards hospitality
• Chinese gamblers are having a hard time getting visas
• Many exciting projects are supposed to attract new visitors

The mess created by the junkets led to a chain reaction, which saw revenues from lower key gamblers also subside in late 2014, despite the fact that they possessed higher-margin factors. The overall economy of Macau has since been reduced to a lower state, a sign that definite improvements must be made imminently, before it’s too late.

Chinese players has a hard time getting to Macau

Tourist and visitor numbers are lower than last year. During the first quarter of 2015, visitor figures dropped 3.6% as compared to the first four months of 2014. One of the main reasons why many tourists decided to turn to other destinations in the region is due to the current policies. The mass-market guests normally comprise residents of the mainland, but with the recent changes to Chinese gambling laws, it has been harder for them to obtain visas. This is what turned many away as they set their sights on other destinations.

Chinese passport control

With restricted visa policies less gamblers can make the trip from the mainland

Tighter visa restrictions were not the only obstacles facing potential visitors. China also started to further their efforts in the oversight of money transaction. UnionPay debit cards were just one of the systems for transaction that were monitored, which made it rather difficult for mainland Chinese to make the proper transfers to other accounts. According to
online internet casinos, UnionPay is normally regarded as one of the most popular options for making money transfers from the mainland to Macau.

The gambling mecca wasn’t aided by the fact that the local authorities also introduced new regulations that prohibited smoking at the casinos. This act didn’t go well with many high rollers that like to whip out their cigars while gambling at the tables. And then there is also the issue of prices being sky-high in the popular gaming hub. If players want to find a hotel room in the city, then they will have to fork out a small fortune. For instance, it is normal to find rooms that cost USD 350 for a single night, while tables at the casinos can go up to USD 130 for minimum bets.

In comparison to Las Vegas, there is a huge difference considering that players can find much more affordable accommodation and tables that require fare lower minimum wagers in the gambling hub of the US. Ben Lee, a popular consultant hailing from Macau, stressed that the current practice among regular visitors from the mainland is to search for good value, instead of expensive pursuits. “They came, they saw, they left with their money in their pockets.” In light of the economic climate in Macau, prices have started to drop accordingly, however in the long run potential tourists still perceive the former Portuguese colony as an unlike destination, due to its reputation as one of the world’s most expensive towns.

Macau places more importance on hospitality

Junket scheme

The way junkets attracted highrollers is on the decline, and can’t support the Macanese casino industry any longer (The Wall Street Journal)

New development projects were given the go-ahead recently, as they will aim to attract customers that come from the middle-class – playing the tables on a budget and staying in less lavish and therefore less expensive rooms. However, the problem right now is trying to change Macau’s image and try to convert it into a more affordable place for everyday travellers. The fact that many still view it as an out-of-reach city will not work in the favour of the new projects.

According to gambling news, Morgan Stanley analysts indicated that gamblers usually look for two main elements when choosing a casino. The first one concerns minimum bets at the tables, as they want to be able to play without risking too much, while the second item on the list revolves around recreational facilities that the new developments could offer.

Only last week did a new casino and resort open up to the public. The popular Galaxy Entertainment Group introduced the second phase of the planned gaming facility and resort that is reported to be valued at billions of dollars. Unlike previous construction projects, this one will not feature a casino as the main area of business. Instead, it will contain amenities such as “a shopping destination and café society for the style community” while also featuring “the world’s longest skytop aquatic adventure river ride.” Hopefully, this will help Macau bring it back on the map as the world’s best tourist destination, as it is set to offer far more than just gambling in the future.

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