Strategy or Illusion
In the budget forecast for 2023, the Chief Executive once again limits himself to copy and paste the tax revenue registered in previous years: 130 billion patacas. In 2022, as we already know, it fails miserably – it will hardly exceed 45 billion patacas.
In fact, as it was always doomed to fail, in the years of pandemic recession. And yet, it continues to insist… which leaves two possible conclusions: either it is simply maintaining the illusion – without any strategic vision – or it now has data that allow it to think that this is the moment when the economy will take off.
There is, now, a new fact: from what we are told by sources in the operators, the six current concessionaires – as well as the seventh competitor – will already be surrendered to a set of specifications imposed by the Gaming Commission, which includes heavy investments in the production of events and shows.
A new logic of rebranding the city is underway: now the tourists who come from China no longer come to gamble, taking the opportunity to see Macau; they are rather MICE, culture and lifestyle clients… and they take the opportunity to gamble. In the short term, the question is in the bill: as long as there is enough revenue at the tables to pay for everything else… everything is fine. But for that the city has to open up – and change its mindset. Otherwise, the state would be cheating the operators.
And that doesn’t make sense.
A lot more ink will flow on the debate that this change requires, and it’s not even worth discussing the time that was obviously lost – at least ten years ago it was known that it had to be this way. Now, it’s time to move forward… against fierce competition from other jurisdictions, much more attractive from a tourist point of view, such as Singapore, Thailand, Japan or Dubai.
Granted that off-table revenue can gradually grow, the budgetary pressure, in the short and medium term, is obvious; both for the companies’ operating income and the tax revenue they produce.
And in this context, either Macau quickly reverses the pandemic control policy – perhaps even cancelling it, at least in the corridor with Hong Kong – or Ho Iat Seng’s predictions once again make no sense.
There is at this point much speculation – and no certainty – about the dynamic zero-case policy. What is beyond doubt is that there will be no exhibition conferences, no shows… much less attracting players to markets in the West – another demand from the Gambling Commission – as long as the pandemic restrictions remain in place.
To get out of the illusion, and into a strategy, you have to take one step at a time.
In addition to having to open borders, Macau is currently a very unattractive city, on several levels. It lacks critical mass, color and joy – to be blunt and synthetic.
What is clear is that the casino infrastructures are not enough to transform Macau into an attractive destination beyond the gaming tables. And this discussion has to be done with a seriousness that we do not see today.
*General Director of PLATAFORMA