The Chinese Ministry of Public Service announced a policy change this week which could bring new revenues to Macau casinos. The new policy means up to 3 million mainland Chinese residents can renew travel visas which allow them access to China’s special semi-autonomous regions, Macau and Hong Kong.

The announcement came from Qu Yunhai, Public Security Ministry’s State Immigration Administration’s director, who said, “When the new policies are in place, mainland visitors can travel to Hong Kong, Macau, and Taiwan whenever they please.”

The new policy begins on September 1, 2018, and it is a further good sign for Macau casino operators. The first half of 2018 has seen a rapid rise in visits to Macau. Overall, the total number of tourists to Macau is up 8% year-to-year over the first 6 months of the year.

Overall the number of visitors from mainland China is up by 13%. Of the 16.8 million total visitors to the city of Macau from January to June 2018, 11.7 million people came from mainland China.

Lawrence Ho Talks 2018 1st Half

Gross gaming revenues were up by 18.9% from 2017 to 2018 for the entire city of Macau. Lawrence Ho, CEO of one of Macau’s largest casino companies, Melco Crown, said of the 2018 numbers, “This cycle, compared to the previous [cycle]…it’s been really both mass and VIP.”

The Ministry of Public Service’s new policy should increase the numbers over the final four months of 2018 significantly, though it is hard to estimate by how much. Officials say the immediate impact will be relatively small.

Hong Kong-Zhuhai-Macau Bridge’s Impact

One huge factor coming in the near future is the Hong Kong-Zhuhai-Macau Bridge, a 34-mile long bridge that will connect Macau to Hong Kong via land travel. Such infrastructure should have a massive impact on the number of visitors to China’s casino city, because of the proximity to Hong Kong. It would be like New Yorkers visiting Monmouth Park racetrack.

When asked about the bridge, the Macau Transportation Bureau said it was open to allowing casino shuttles to bring gamblers from Hong Kong to Macau. If so, then the impact could be similar to the 50 shuttles which bring New York City area Asian-Americans from the Big Apple to the Bethlehem Sands Resort and Casino in Bethlehem, Pennsylvania — a suburb of Philadelphia.

The Asian-American influx to Bethlehem Sands made the casino the highest grossing gaming establishment in Pennsylvania, which collects the second-most gaming revenues of any US state — behind only Nevada. Bethlehem Sands expanded its baccarat tables to accommodate the gamblers, so shuttle service was a huge factor for the casino.

Chinese Economy Slowing Down

The influx of customers could come at a good time for Macau casino operators. The Chinese economy is showing further signs that it is slowing down. While Chinese economic growth continues at a brisk pace by international standards, it appears to be expanding at a much slower rate as it did during the economic miracle from the late-1990s to the mid-2010s.

In a way, that is to be expected, because such economic expansion seems unsustainable perpetually. At the same time, Sanford C. Bernstein and Co. financial analysts said that the Macau casino industry could be affected by any economic slowdown.

Bernstein Cites Real Estate Prices

Bernstein said a decline in real estate prices could signal a slow-down for Macau casino revenues. Property increases corresponded with better Macau casino revenues in recent years, while a slump in housing prices in 2015 corresponded with lower Macau casino revenues at the same time.

Of course, other factors were huge in that slow down. One could argue the case from either side. Bernstein argued that real estate prices are most important, stating, “For consumers, real estate is simultaneously a vehicle for store of value, and the most popular asset class for investments and has a major impact on an individual’s notion of wealth. Real estate is the single largest category of assets held by Chinese high net-worth individuals.”

About the Author
April Bergman avatar
April Bergman

April Bergman was a longtime news blogger for BOC. She wrote gaming news posts from January 2013 until September 2018. April also wrote slot reviews, strategy articles, and online casino reviews for the site.

April Bergman began in the online gaming industry in August 2010. From 2010 to 2013, she managed evergreen content for several top online casino. Her duties included developing and maintaining multiple websites in the gaming space. When not writing about online gambling, April loves horse racing, travel, photography, and gardening. She's began in the business as a devoted poker players and spent several years as a card game editor on the now-defunct DMOZ. These days, she lives with her husband and two children in the Toronto metropolitan area.

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April Bergman was a longtime news blogger for BOC. She wrote gaming news posts from January 2013 until September 2018. April also wrote slot reviews, strategy articles, and online casino reviews for the site.

April Bergman began in the online gaming industry in August 2010. From 2010 to 2013, she managed evergreen content for several top online casino. Her duties included developing and maintaining multiple websites in the gaming space. When not writing about online gambling, April loves horse racing, travel, photography, and gardening. She's began in the business as a devoted poker players and spent several years as a card game editor on the now-defunct DMOZ. These days, she lives with her husband and two children in the Toronto metropolitan area.

READ MORE
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