Sam’s the Man
No casino jurisdiction was hit harder during the Covid pandemic than Macau when the Chinese government instituted its “zero-Covid” policy.
Up until that time, Macau had been smashing every gross gaming revenue record of any gaming jurisdiction in history, reaching US$29 billion in 2019, the last full year before Covid. In 2023, it had bounced back to about 60 percent of the 2019 total, $22.3 billion.
In the meantime, however, all of the licensees had to renew their concessions, and under then-chief executive Ho Iat Seng, the companies were required to invest billions of dollars in non-gaming amenities to attract a wider range of visitors and diversify the economy. Most of the companies agreed reluctantly, since most had already sunk billions into non-gaming, with uncertain results.
In his final address on the gaming industry, Ho predicted that in 2025, GGR would exceed that of 2019 and reach $29.9 billion. This should ease the concerns of the concessionaires, but the entrance of the new chief executive, Sam Hou Fai, hasn’t been very comforting.
Prior to his election, Sam said about gaming, “For a period of time, the tourism and gaming industry developed in a disorderly manner and expanded wildly,” which “is not beneficial for Macau’s long-term development.”
All this follows a serious crackdown on the junket industry, which resulted in the majority of junket operators closing up shop and some even being imprisoned. This has caused the gaming industry to change the way it attracts customers and has forced it to focus more on the “premium mass” market, rather than the whales brought in by junkets.
Sam backed off his more critical comments soon after his nearly unanimous election. He said he has five policies that he wants to emphasize: enhancing public governance capabilities and standards; speeding the development of a diversified economy; better integrating into and serving the overall development of the country; improving the institutional mechanism for education, science and technology talents; and protecting and improving peoples’ livelihoods.
“There are about 23,000 dealers employed in Macau, involving thousands of local families, and their employment is part of the protection of Macau’s social stability,” he said.
Economic diversification remains, however, not only one of Sam’s principal goals, but also the Chinese government. Chinese President Xi Jinping has expressed a desire that the former Portuguese colony can promote healthy and sustainable economic development and diversify its economy. Some of the ways Sam wants to accomplish that is via non-gaming tourism, traditional Chinese medicine, finance, exhibition and commerce.
With Macau casino GGR almost back to normal, Sam needs to focus on the economy, and the recent appointment of his cabinet reflects that desire. The appointment most important to the casinos would be Tai Kin Ip, the former director of the Economic Services Bureau, who becomes the secretary for economy and finance. Tai said that he would allocate additional resources for “appropriate economic diversification.”
