Macao’s Casino Reliance Vulnerability
Macao, the only Chinese city where gambling is legal, has long been dependent on its gaming sector, which accounted for over half of its GDP in 2019. However, the COVID-19 pandemic exposed the vulnerability of this heavy reliance on casinos when revenue plummeted by 30% due to casino closures.
Macao’s Non-Gaming Economic Shift
Now, with borders reopened, Macao is eager to diversify its economy and reduce its dependence on gaming. The city aims to transform itself into a technology and innovation hub, with non-gaming ventures contributing to 60% of its GDP. New licensing rules require casino operators to invest in businesses outside of gaming.
One industry of focus is the meetings, incentives, conventions, and exhibitions (MICE) sector. Casino operators are incorporating MICE businesses into their offerings to attract multinational companies for annual conferences and corporate events.
For instance, Sands China’s integrated resort, The Venetian, is allocating 93% of new investment to non-gaming projects and upgrading convention facilities. The company also plans to expand its international sales offices across Asia, Europe, and the United States.
Galaxy, another casino operator, intends to allocate most investments to non-gaming, with plans to build a high-tech amusement park.
Macao Boosts Finance for Greater Bay, Faces Talent Gap
Macao is also bolstering its financial services to support the Greater Bay Area project. It recently launched the Micro Connect Macao Financial Assets Exchange to fund small Chinese businesses seeking expansion. However, the city faces a talent shortage, especially in high-skilled roles outside the gaming sector.
Efforts are underway to train and reskill the local workforce, including offering courses in emerging industries like artificial intelligence and fintech. The goal is to prepare residents for job opportunities in diversifying sectors and reduce dependence on non-resident labor.
Labor laws are tightening, making it harder to obtain non-resident work permits. As a result, some hotel rooms and restaurant reservations remain unoccupied due to the labor shortage, hindering the city’s reopening plans.
To retain young residents and attract them to stay and work in Macao, efforts include inviting tech companies like Tencent and Alibaba to career fairs and encouraging training and reskilling. Developing a qualification framework that sets standards for career development and wages is also being considered to help residents transition to different fields and stay competitive.
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