Macau's Gambling Days are Over

Pre-pandemic Macau was the top gambling hub in the world

The glory days of Macau's casinos raking in US$36 billion annually -- six times more than all of Las Vegas combined are fast evaporating thanks to the Covid-19 pandemic, and President Xi Jinping wanting the former Portuguese colony to pivot away from baccarat tables and slot machines.

And in another sign that this is happening, casino suppliers are quitting Macau for Singapore and the Philippines.

Macau has been told to pivot from gambling

Light & Wonder Inc is a leading provider of casino products and it's relocating its expat staff to the Philippines, the company's top market in Asia, while another equipment maker in Japan is moving 30 percent of its employees to the Philippines and Singapore. 

The Japanese company has also taken half of its inventory out of Macau, as its revenues have plunged 90 percent because of its prolonged slump.

Macau's casinos aren't buying any new equipment until they get licenses to continue operating at the end of the year, and without new sales, Light & Wonder is only getting limited revenues from maintenance and technical support.

Meanwhile, Macau Gaming Equipment Manufacturers Association Chairman Jay Chun said he knew of at least four multinational casino suppliers relocating manpower and resources overseas. The trend could accelerate after the government had announced a cap of 12,000 gaming machines across the city for 2023 under a new casino law. In 2019 there were 17,000 machines.

Though Macau did well for most of the pandemic -- keeping casinos open and allowing a trickle of mainlanders in -- it was hit hard this June when China suspended quarantine-free travel with Macau for more than a month. Tourist numbers were only 300 a day in July, with casino revenue only at US$49 million that month, as casinos were closed for two weeks for a lockdown.

Covid-19 has exacerbated Macau's woes

Many are worried about China-style lockdowns in Macau, which is why they are staying away from the city.

"Singapore and the Philippines are growing exponentially," Chun said. "Macau has already lost its shine."

The devastating economic blow to Macau is only going to make it even easier for China to turn the pliant city into one Beijing wants it to be. Whether it will be a success or not is another issue.