What role regional politics plays in shaping Macau's future

Beijing's zero-Covid policy and the subsequent Covid-19 shutdown provide context for Han Lee's summary of 'political risk' at G2E Asia on behalf of Bloomberg. This is a major cause of the province's problems in 2022; as a result, numerous disappointing Q2 results have lately been reported.

However, Han Lee also spoke about other key concerns influencing the province.

The 'shared prosperity' strategy that President Xi Jinping instituted to narrow the wealth divide is having a negative impact on Macau's gambling industry.

Because of the legislation, VIP business volumes that Macau relied on before have fallen as a result of some people in China seeing big returns on investment during the recent internet boom and now retaining their riches abroad. Because of this, resort casinos in the area are moving their focus from VIP gambling to mass gaming to compete with casinos in Singapore and the Philippines.

In her talk, Han Lee made an on-the-spot remark on this, adding, "Macau's casinos are trying to shift focus to the mass gaming segment, which has a higher margin."

The tax paid by both regular players and high rollers is another problem. When compared to other Asian gambling hubs like Singapore and Phnom Penh, which provide reduced taxes all around for mainstream gamers and large savings on tax for VIPs, Macau has the highest tax rate at 40%.

While painting a bleak picture of the Covid-ravaged region, Bloomberg did remark that Macau's returning and growing mass gaming base will give major respite in the near future.