Beijing’s most recent economic stimulus package, which intends to boost consumer spending and confidence, could benefit Macao’s casino sector. Seaport Research Partners predicts that the actions will help the city’s gambling industry in the long run.
“The central government’s actions are projected to operate as a favorable tailwind” for Macao’s revenues,” said Vitaly Umansky, senior analyst at Seaport Research Partners. He clarified to GGR Asia that these initiatives will probably continue to help the industry long after 2025.
The Chinese government’s Special Action Plan introduced several measures, including improvements in minimum wage adjustment mechanisms and broader channels for property income. These changes aim to stimulate wage growth, encouraging higher consumer spending. While direct cash handouts were not part of the plan, the emphasis on expanding consumer capacity signals Beijing’s commitment to economic recovery.
Umansky also pointed to recent adjustments in travel policies between mainland China and Macao, further enhancing the city’s appeal to tourists and gamblers. “We expect that over the medium term, these measures will help support [Macao’s] demand growth. Improvement in consumer confidence and expansion of consumer wallets should provide long-term support to the growth of Macao’s base mass customer base.”
Mass Market Recovery Faces Challenges
Even though Macao’s casino industry is still recovering from the pandemic, pressure is still being placed on the base mass market. According to Seaport’s data, overnight tourists from Guangdong and Hong Kong are 15% lower than day-trippers, and this sector is still 15% below 2019 levels.
Nonetheless, the premium gaming market has proven resilient and has helped the industry’s total revenue growth. As spending rises and consumer confidence grows, analysts predict a slow rebound in the mass market.
Fitch Ratings has expressed worries on structural issues in China’s economy, notwithstanding the optimism surrounding Beijing’s stimulus initiatives. The measures’ efficacy may be constrained by enduring problems such as economic uncertainty, demographic changes, and excessive local government debt.
While these risks remain, industry experts believe that a combination of stimulus policies, relaxed visa regulations, and improved travel accessibility will encourage a steady flow of visitors to Macao. This support is expected to sustain the city’s gaming revenue growth in the foreseeable future.
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