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A New Normal

Ben Blaschke by Ben Blaschke
Tue 7 Dec 2021 at 16:08
A New Normal
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The return of MGS Summit in November saw industry experts outline their thoughts on what Macau’s gaming industry will look like on the road to recovery.

What will Macau look like in a post-COVID world? It’s a question that attracted significant attention during November’s MGS Summit, when industry experts offered their opinion on what would change and what would stay the same as the world’s biggest land-based gaming hub emerges from the global COVID-19 pandemic.

While opinions varied wildly on exactly when Macau might resemble something like the city that generated MOP$292.46 billion (US$36.5 billion) in gross gaming revenues in 2019, there was widespread agreement on the fact that changes were inevitable – particularly on the casino floor.

“You look around the Macau market at the moment and anything from 41% to 52% [of slot areas] have their electronic product turned off, so as floors get changed and rejigged and we understand what health departments want, the casino floor is going to change dramatically,” said Scientific Games Vice President and Managing Director, Asia, Ken Jolly.

“That’s also going to reflect what players prefer in terms of how close they are. They will probably become a little bit more distant and product layouts will become different. There will be more pods rather than back-to-back banks so that we can get all the product on the floor turned back on.”

Key to recovery will be the ability of Macau’s gaming and tourism operators to provide guests with confidence that they can move around in a safe manner. This has already been on display in mainland China, where domestic tourism surged by over 100% in the first six months of 2021 as tourists regained confidence in their ability to travel to and from other prefectures. By comparison, visitation to Macau has varied wildly throughout 2021 due to the frequent tightening and loosening of border restrictions.

According to Aristocrat’s General Manager APAC, Lloyd Robson, this highlights a key consideration for Macau operators heading into 2022.

“I think [recovery] will largely be technologically driven, the use of digitisation in Macau,” Robson explained. “That’s not necessarily from a gaming transaction point of view but as an enabler to shuffle people across the border, shuffle them into their hotel room and move them around the property in an efficient manner and in a contactless manner as well. I expect that’s where we will see the most innovation and enhancement compared to a couple of years ago.”

Behaviourally, time will tell how players react to restrictions that may be imposed on the gaming floor.

Mask mandates, for example, could either be seen as an impediment to freedoms or conversely they “could start to become a norm for players when they are in a close-knit environment,” according to IGT Sales Director for Asia, Michael Cheers. “They may want to continue that behaviour simply to prevent things like the common cold. But once things become voluntary rather than mandatory, players will find their own level and they will become much more comfortable.

“I have a feeling that once masks become a voluntary choice and people feel that’s another step towards freedom, that they are able to engage more and move around the casino more freely, I think that will have a significant psychological effect.”

From an electronic gaming perspective at least, Cheers believes the COVID-19 pandemic will prove beneficial in Macau, which has traditionally seen more than 90% of revenues come from gaming tables instead.

“There is no doubt the electronic space continues to grow in our market and that includes both ETG and the slot offering,” said Cheers.

“While some of the floors may be redesigned to help cater for some sort of spacing and social distancing in the format of bank layouts and so on, I have no doubt the ETG product is going to grow, quality slot products will grow and I think our customers have become more and more attuned to the electronic style of game offering.”

Either way, Robson doesn’t expect the “new norm” to stick around forever.

“I think an interesting parallel is the aviation industry around 9/11 and what happened in the period post-9/11 until today,” he said.

“Of course new innovations came in but invariably things largely came back to where they had been, so I think there will be a lot of temporary changes but this will also create opportunities for new experiences.”

Notably, the impact of the COVID-19 pandemic, which saw Macau’s GGR fall 79% year-on-year to MOP60.44 billion (US$7.57 billion) in 2020, hasn’t dampened the enthusiasm of operators to invest in Macau, with Sands China having this year opened its US$2 billion The Londoner Macao project and Galaxy Entertainment Group (GEG) nearing completion of Galaxy Macau Phase 3.

GEG’s Senior Vice President of Public Relations, Buddy Lam, told MGS Summit he expected cities within the Greater Bay Area to resume intense competition for tourism dollars in the not-too-distant future.

“We have confidence in Macau’s long-term future development,” Lam said. “Once the COVID-19 pandemic is under control we will see visitation return to 2019 levels in no time.

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“We will be prepared for the recovery but in the meantime we should work on self-improvement within this industry. The development of the Greater Bay Area means there will be competition between cities in the region.

“For example, Guangzhou and Hong Kong have been rolling out a number of large-scale tourism projects during this time, so we need to be prepared to face this competition and use this downtime to improve our position against our competitors.”

MGM China’s Kenneth Feng said the future of MGM China, Macau’s smallest concessionaire by market share, was “dependent upon investment”.

“But as China further develops we will enjoy prosperity, I have confidence in that,” he said.

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Ben Blaschke

Ben Blaschke

A former sports journalist in Sydney, Australia, Ben has been Managing Editor of Inside Asian Gaming since early 2016. He played a leading role in developing and launching IAG Breakfast Briefing in April 2017 and oversees as well as being a key contributor to all of IAG’s editorial pursuits.

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