The pandemic of 2020 has certainly disrupted most industries, from automotive to the restaurant industry.
But how did it affect the gambling industry, specifically, the booming gambling economy of Macau, the Las Vegas of Asia? And more, importantly, wait awaits the industry of Macau post-pandemic? The team of experts at Casino Hex keep a sharp watch over the Chinese gambling industry at casinohex-cn.com , and took a moment to weigh in about the future of one of the most popular gambling spots in the world.
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From Portuguese Colony To Asia’s Las Vegas
A colony of Portugal from the mid 16th century to 1999, at which time it was taken under the administrative control of China, Macau is a less than the 13-square-mile city that experienced a huge economic boom in the late 20th and early 21st centuries when it became a fresh gambling spot thanks to its history of being an international trade port, often connecting the goods of the East and the West. People like Stanley Ho, otherwise known as the “gambling king,” took this area and made it into a huge attraction that rakes in billions of dollars per year and produces revenues more than double that of Las Vegas thanks to its worldwide appeal and its glitzy and luxurious casino environment.
COVID-19’s Effects on the Industry
At the beginning of 2020, prospects for the gaming industry looked really promising. Unfortunately, with the COVID-19 pandemic negatively influencing the entire world, the gambling business was no exception. An article from Calvin Ayre points out that the locales most affected by the downturn in the gaming industry’s success were places whose GDP was largely influenced by its gambling industry (like Macau).
Furthermore, because Macau specifically boasted “gross gaming revenue [which] totaled $36.5 billion in 2019 – about six times more than the LasVegas strip, closing the huge array of casinos in the region was devastating to the location’s yearly revenue, even if they only did it for a few weeks. Indeed Carlos Lobo, a long-term resident of Macau, said “it’s just mind-boggling. I’ve never seen anything like this in my 25 years here.” This speaks to how unprecedented the pandemic was, and how serious the prevention of the spread was to the Macau casino community. Reports from the fall of 2020 describe Macau’s revenues falling as much as 70.5% year-over-year.
Macau’s Unique Resilience
While many other gambling cities prepared for the worst-case scenario, the sheer depth of Macau’s revenue pockets meant that if any location could ride out the storm caused by COVID-19, it was Macau. In fact, it was estimated that at the beginning of the pandemic, Macau could “survive on zero revenue from several months to a few years.” This is largely part due to the fact that the gambling city is the largest in the world, attracting an international audience that enjoys spending money on the luxurious experiences offered by Macau as a city.
The only downside for Macau – when compared with how coronavirus is affecting other gambling-reliant economies? They have had to put a hold on some amendments to the region’s gaming laws, which will currently expire in 2022. Additionally, it’s unclear whether or not Macau will end up hosting their long-awaited version of CES: the Beyond conference. Jason Ho, a Macanese venture investor thinks that the future for this conference is bright, stating that he thinks Macau has some serious potential to reinforce its position as a “neutral” international hub and that combined with Macau’s infrastructure and a huge array of hotels would make it an ideal locale for a conference once the pandemic is over.
Overall, we’re hopeful that after the pandemic has subsided, Macau’s resilience will result in the continuation of its success as global gambling and investing hub. Even though many of its casinos had to temporarily close down, its global status and subsequent war chest from years of financial success have definitely helped it endure this temporary hiccup in revenues. We’re definitely looking forward to seeing how Macau grows in the next few years, especially keeping in mind the city’s goal of becoming gambling up not just for the East, but for countries all over the world as well.
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