Lying on the western side of the Pearl River Delta, Macau is one of the two Special Administrative Regions in the People’s Republic of China, with Hong Kong being the other.
As an offshore financial center and tax haven, Macau has a well-developed sector of banking and other financial services, but the major contributors to the region’s Gross Domestic Product and to the government’s revenue have long been economic activities such as tourism and gaming.
Within the period 1962-2002 Macau’s gambling sector had been under a government monopoly mechanism of licensing. 2002 marked the end of that system and 6 casino operating concessions and subconcessions were granted to Las Vegas Sands, Sociedade de Turismo e Diversões de Macau, Galaxy Entertainment Group, the partnership of MGM Mirage and Pansy Ho, Wynn Resorts, and the partnership of Melco and Publishing and Broadcasting Limited (PBL).
A Closer Look at Industry Numbers
Within the period 2007-2014 the number of brick-and-mortar casinos in Macau increased from 28 to 35.
| Number of Casinos in Macau | |||||||
|---|---|---|---|---|---|---|---|
| 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 |
| 28 | 31 | 33 | 33 | 34 | 35 | 35 | 35 |
The region’s gross gambling and gaming revenue has been surging on a regular basis during the past 7 years to reach a peak of USD 45.27 billion in 2013. For the sake of comparison, gross gaming revenue generated in Las Vegas totaled at USD 6.207 billion in 2012.
| Gross Gaming Revenue in Macau in billion US dollars | |||||||
|---|---|---|---|---|---|---|---|
| 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 |
| 10.50 | 13.74 | 15.06 | 23.72 | 33.66 | 38.18 | 45.27 | 44.16 |
| Monthly Gross Revenue from Games of Fortune in Macau | |||||
|---|---|---|---|---|---|
| Gross Revenue in billion Macanese Pataca | Gross Revenue in billion USD* | ||||
| 2013 | 2014 | Change % | 2013 | 2014 | |
| January | 26.864 | 28.739 | +7.0% | 3.363 | 3.597 |
| February | 27.084 | 38.007 | +40.3% | 3.390 | 4.757 |
| March | 31.336 | 35.453 | +13.1% | 3.922 | 4.438 |
| April | 28.305 | 31.318 | +10.6% | 3.543 | 3.920 |
| May | 29.589 | 32.354 | +9.3% | 3.704 | 4.050 |
| June | 28.269 | 27.215 | -3.7% | 3.538 | 3.407 |
| July | 29.485 | 28.415 | -3.6% | 3.691 | 3.557 |
| August | 30.737 | 28.876 | -6.1% | 3.847 | 3.614 |
| September | 28.963 | 25.564 | -11.7% | 3.625 | 3.200 |
| October | 36.477 | 28.025 | -23.2% | 4.566 | 3.508 |
| November | 30.179 | 24.269 | -19.6% | 3.778 | 3.038 |
| December | 33.460 | 23.285 | -30.4% | 4.188 | 2.915 |
* USD/MOP exchange rate equals the closing price on December 31st 2014, or 7.9891 Macanese pataca per US dollar.
As can be seen from the table above, the first five months of 2014 had a higher gross revenue compared to the same months in 2013, while June has been the first month in five years to produce a year-over-year decline in revenue. In fact, a similar tendency has been observed in the last seven months of 2014, with December’s drop being the most significant.
| Gross Revenue from Different Types of Games of Fortune in million Macanese Pataca | |||||||
|---|---|---|---|---|---|---|---|
| Game Types | 2013 | 2014 | |||||
| Q1 | Q2 | Q3 | Q4 | Total | Total in million US dollars** | ||
| Roulette | 940 | 301 | 215 | 346 | 166 | 1028 | 128.7 |
| Blackjack | 3052 | 808 | 745 | 703 | 677 | 2933 | 367.1 |
| VIP Baccarat | 238524 | 65062 | 54643 | 46771 | 46059 | 212535 | 26603.1 |
| Baccarat | 91599 | 28491 | 28032 | 27736 | 22268 | 106527 | 13334.0 |
| Fantan | 290 | 83 | 69 | 76 | 86 | 314 | 39.3 |
| Cussec | 6756 | 1954 | 1965 | 1934 | 1730 | 7583 | 949.2 |
| Paikao | 96 | 35 | 31 | 30 | 26 | 122 | 15.3 |
| Mahjong | 165 | 38 | 36 | 32 | 26 | 132 | 16.5 |
| Slot Machines | 14384 | 3943 | 3621 | 3747 | 3133 | 14444 | 1808.0 |
| Mahjong Paikao | 8.3 | 2.9 | 3.2 | 3.5 | 2.7 | 12.3 | 1.5 |
| Makccarat | – | – | – | – | – | – | – |
| 3-Card Poker | 222 | 64 | 57 | 49 | 45 | 215 | 26.9 |
| Fish-Prawn-Crab | 9 | – | – | – | – | – | – |
| 3-Card Baccarat Game | 414 | 144 | 136 | 131 | 127 | 538 | 67.3 |
| Craps | 145 | 19 | 58 | 51 | 34 | 162 | 20.3 |
| Texas Holdem Poker | 270 | 66 | 64 | 58 | 69 | 257 | 32.2 |
| Tombola | 1.4 | 0.4 | 0.4 | 0.3 | 0.4 | 1.5 | 0.2 |
| Lucky Wheel | 24 | 5 | 5 | 4 | 5 | 19 | 2.4 |
| Live Multi Game | 1487 | 505 | 570 | 586 | 595 | 2256 | 282.4 |
| Stud Poker | 1661 | 457 | 417 | 385 | 322 | 1581 | 197.9 |
| Q Poker | – | – | – | – | – | – | – |
| Casino War | 293 | 78 | 70 | 62 | 57 | 267 | 33.4 |
| Fortune 3 Card Poker | 407 | 143 | 150 | 150 | 152 | 595 | 74.5 |
| Fortune 8 | – | – | – | – | – | – | – |
| Dragon Phoenix | – | – | – | – | – | – | – |
| All Games | 360747.7 | 351521.8 | 44000.2 | ||||
Source: Gaming Inspection and Coordination Bureau Macao
** USD/MOP exchange rate equals the closing price on December 31st 2014, or 7.9891 Macanese pataca per US dollar.
Within the gross revenue structure, alongside slot machines, table games such as VIP baccarat, has had the largest contribution. VIP baccarat revenue accounted for 60.46% of total gaming revenue in 2014, while contributing 66.12% a year ago. Baccarat revenue accounted for a larger portion of total gaming revenue in 2014, 30.30%, up from 25.39% in the preceding year. Revenue from slot machines contributed to 4.11% of total gaming revenue in 2014, up from 3.99% in 2013, while blackjack revenue share was almost unchanged – 0.83% in 2014, down from 0.85% in 2013. Roulette revenue share was also little changed – 0.29% of total gaming revenue in 2014, up from 0.26% in 2013.
| Game Types | 2013 | 2014 | |||||
| Q1 | Q2 | Q3 | Q4 | Total | Total in million US dollars*** | ||
| Games of Fortune | 360749 | 102199 | 90887 | 82855 | 75580 | 351521 | 44000.18 |
| Greyhound Racing | 178 | 36 | 34 | 37 | 38 | 145 | 18.15 |
| Horse Racing | 365 | 102 | 88 | 56 | 60 | 306 | 38.30 |
| Chinese Lottery | 5 | 2 | 1 | 1 | 2 | 6 | 0.75 |
| Instant Lottery | 0.0024 | 0.0009 | 0.0003 | 0.0002 | – | 0.0014 | 0.00 |
| Sports Lottery – Football | 419 | 115 | 203 | 165 | 115 | 598 | 74.85 |
| Sports Lottery – Basketball | 150 | 37 | 23 | 29 | 49 | 138 | 17.27 |
| All Activities | 361866 | 102491 | 91236 | 83143 | 75844 | 352714 | 44149.51 |
Source: Gaming Inspection and Coordination Bureau Macao
*** USD/MOP exchange rate equals the closing price on December 31st 2014, or 7.9891 Macanese pataca per US dollar.
Macanese gambling and gaming industry has a relatively diversified revenue base. Within the entire revenue pool, revenue from games of fortune has played a dominant role in the past two years. It accounted for 99.66% of the entire gaming revenue in 2014 and for 99.69% of total revenue in 2013. Revenue from bets on football events has contributed to a mere 0.17% of total revenue in 2014, while its share was 0.12% a year earlier.
| Total Number of Gaming Tables in Macau Casinos | |||||||
|---|---|---|---|---|---|---|---|
| 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 |
| 4375 | 4017 | 4770 | 4791 | 5302 | 5485 | 5750 | 5711 |
Since 2011 the total number of gaming tables located at Macau casinos has been holding well above 5 000, as in 2013 the number peaked at 5 750.
| Total Number of Slot Machines in Macau Casinos | |||||
|---|---|---|---|---|---|
| 2009 | 2010 | 2011 | 2012 | 2013 | 2014 |
| 14363 | 14050 | 16056 | 16585 | 13106 | 13018 |
The number of slot machines located at Macau casinos has peaked at 16 585 in 2012, while in 2014 the registered number of slots has been the lowest in at least six years (13 018).
| Gross Revenue from Different Gaming Activities in million Macanese Pataca | ||
|---|---|---|
| Game Types | Q1 2015 | Total in million US dollars**** |
| Games of Fortune | 64777 | 8108.78 |
| Greyhound Racing | 34 | 4.26 |
| Horse Racing | 54 | 6.76 |
| Chinese Lottery | 2 | 0.25 |
| Instant Lottery | 0.0009 | 0.00 |
| Sports Lottery – Football | 124 | 15.52 |
| Sports Lottery – Basketball | 41 | 5.13 |
| All Activities | 65032 | 8140.70 |
Source: Gaming Inspection and Coordination Bureau Macao
**** USD/MOP exchange rate equals the closing price on March 31st 2015, or 7.9885 Macanese pataca per US dollar.
The table above reveals a 14.29% drop in revenue from games of fortune during the first quarter of 2015 compared to Q4 2014, while revenue from bets on football events went up 7.83% in Q1 2015.
| Gross Revenue from Different Types of Games of Fortune in million Macanese Pataca | ||
|---|---|---|
| Game Types | Q1 2015 | Total in million US dollars# |
| Roulette | 247 | 30.92 |
| Blackjack | 582 | 72.85 |
| VIP Baccarat | 37671 | 4715.65 |
| Baccarat | 20331 | 2545.03 |
| Fantan | 80 | 10.01 |
| Cussec | 1641 | 205.42 |
| Paikao | 25 | 3.13 |
| Mahjong | 24 | 3.00 |
| Slot Machines | 2905 | 363.65 |
| Mahjong Paikao | 2.5 | 0.31 |
| Makccarat | – | – |
| 3-Card Poker | 40 | 5.01 |
| Fish-Prawn-Crab | – | – |
| 3-Card Baccarat Game | 114 | 14.27 |
| Craps | 7 | 0.88 |
| Texas Holdem Poker | 67 | 8.39 |
| Tombola | 0.4 | 0.05 |
| Lucky Wheel | 5 | 0.63 |
| Live Multi Game | 537 | 67.22 |
| Stud Poker | 307 | 38.43 |
| Q Poker | – | – |
| Casino War | 43 | 5.38 |
| Fortune 3 Card Poker | 149 | 18.65 |
| Dragon Phoenix | – | – |
| All Games | 64778 | 8108.89 |
Source: Gaming Inspection and Coordination Bureau Macao
# USD/MOP exchange rate equals the closing price on March 31st 2015, or 7.9885 Macanese pataca per US dollar.
Revenue from VIP Baccarat marked an 18.21% drop during the first quarter of 2015 compared to Q4 2014, while Baccarat revenue went down 8.70% during the same period. Slot machine revenue shrank 7.28% on a quarterly basis, as well as revenue from table casino games such as Blackjack (-14.03%). On the other hand, Roulette revenue increased 48.80% in Q1 2015 compared to the preceding three months.
