Sam Hou Fai plans to diversify the revenue streams of Macau through a non-gaming approach. [Image: Shutterstock.com]

A new boss in town

Macau is different to other gambling hubs for a range of reasons, one is that it is governed by a Chief Executive much like a company. The Special Administrative Region (SAR) of China has been led by its third CEO Ho Iat Seng since 2019, but all of that is set to change after he decided he will not stand for a second term.

His replacement is all but confirmed. Sam Hou Fai, the former President of the Court of Final Appeal in Macau, received a vote of 96% by the Election Committee. He will be the only candidate for the upcoming election on October 13.

he referred to the industry’s expansion as “barbaric”

Of course, gambling is a vital subject for anyone hoping to take over the most lucrative casino hub in the world. It’s also a topic on which Hou Fai has not proven incredibly consistent. Announcing his candidacy in August, he referred to the industry’s expansion as “barbaric” and something that could hurt Macau.

Over the weekend, he spoke in a Candidates’ Platform Presentation and Questions and Answer Session, during which it was clear he had softened his tone somewhat. He said that the Macau gambling industry “will not shrink or be shut down” under his control, no doubt allaying the fears of Melco Resorts, Wynn Resorts, and co.

Hou Fai’s blueprint

Despite confirming that he will not shrink the industry, Hou Fai did announce that he wants to diversify streams of income.

This is a similar tactic to that taken by Ho Iat Seng. In 2020, the Chief Executive raised concerns about the over-reliance on the gaming industry amid the coronavirus pandemic. He followed this in 2023 by announcing a new strategy, directing focus towards tourism, healthcare, finance, technology, and large-scale events – a plan that he intended to enact from 2024 to 2028.

Commenting on the topic, Hou Fai said: “The gaming industry is Macau’s primary industry, and if it does not develop healthily, it will have far-reaching consequences.” He added that the new government will “strictly enforce” gaming law to protect the development of the licensees. The six concessionaires also have a contractual requirement to invest a combined MOP$130bn (US$16.25bn) in non-gaming projects, a duty that Hou Fai said he would ensure they take seriously.

“No matter how difficult and hard the future may be, we have to do it (economic diversification),” he explained. “Only if we try there will be hope, otherwise society will lose the momentum of development. Economic diversification must move forward, there is no way back.”

Macau leading the way

While the SAR might be set for a new non-gaming direction, its casinos continue to rake in cash each month. In fact, while Las Vegas is known as the gambling capital of the world, Macau has defeated its American counterpart in gross gaming revenue almost every year since 2005.

Macau already up to $14.1bn for H1 2024

Macau lost its crown to Las Vegas as a result of the COVID-19 pandemic in 2022. But the Asian gambling hub has regained its crown and then some, beating Las Vegas by $6.8bn in 2023. That gap is likely to widen even further this year too, with Macau already up to $14.1bn for H1 2024, compared to $9.1bn for Vegas.

Brokerage firm CLSA has updated its GGR forecast for Macau in 2024 following the performance so far, now expecting it to reach $30.3bn for the full year. That would put it 36% above the total earned in 2023.