Macau Chief Executive Sam Hou Fai on Casino Competition

Macau faces rising economic challenges as regional competition grows. Chief Executive Sam Hou Fai stresses the need for diversification and reform.

Macau Chief Executive Sam Hou Fai has raised concerns over the city’s economic vulnerabilities, emphasizing the increasing competition from emerging gaming hubs in Asia and the need for economic diversification. As Macau continues to rely heavily on casino revenue and mainland Chinese tourism, experts warn that long-term sustainability remains a challenge.

“The monotonous structure of visitor sources, the imbalance in the government’s tax revenue and the lack of innovation – these are major problems that still need to be improved and resolved,” he said. 

He added: “At the internal economic level, it is expected that the structural problem of ‘one industry dominates’ will continue for some time and I am afraid that it will be difficult to realize a change in the short term.”

Macau’s Economic Dependence on Gaming Poses Risks

During the latest Economic Development Council meeting, Sam Hou Fai underscored that Macau’s current economic structure is unbalanced, with overreliance on gaming revenue as a primary driver of growth. Despite strong gross gaming revenue (GGR) figures, the region faces structural weaknesses, especially as regional competitors like Japan, Thailand, the Philippines, and Singapore expand their integrated resort offerings.

While Macau recorded a 23.9% increase in GGR in 2024, reaching MOP 226.78 billion, recent declines in December and January raise concerns about sustainability. Visitor arrivals also surged 23.8% to 34.9 million last year, yet the city remains highly dependent on mainland Chinese tourists—a vulnerability in the face of changing travel trends and economic shifts in China.

Regional Competition Threatens Macau’s Dominance

Emerging integrated resort projects across Asia are challenging Macau’s monopoly on high-end gaming tourism. Countries such as Japan and Thailand are implementing legislative measures to attract foreign investments, while Singapore and the Philippines continue to expand their casino and entertainment sectors.

Additionally, global economic trends, including rising unilateralism and protectionism, further complicate Macau’s growth trajectory. Experts suggest that without strategic economic reforms, Macau risks losing market share to more diversified competitors.

Challenges in Economic Diversification and Future Strategies

Macau has long recognized the need for economic diversification, but progress has been slower than expected. Several factors hinder this shift, including:

• Limited revenue sources outside of gaming

• Low innovation capacity in non-gaming sectors

• Overreliance on a single tourist demographic

• Challenges faced by small and medium-sized enterprises (SMEs) in adapting to post-pandemic shifts

To address these issues, Macau’s government is prioritizing the development of the Guangdong-Macau In-Depth Cooperation Zone in Hengqin, aiming to create new revenue streams through non-gaming industries such as technology, finance, and tourism.

Government’s Commitment to Sustainable Growth

Although Sam Hou Fai did not announce specific policy measures, he reiterated the government’s commitment to structural economic reforms. With the upcoming Policy Address, industry stakeholders anticipate clearer strategies to:

• Enhance tourism diversification beyond gaming

• Encourage foreign investments in non-casino sectors

• Strengthen Macau’s regulatory framework for economic resilience

Macau is now at a critical turning point, transitioning from post-pandemic recovery to high-quality, sustainable development. Whether the region can successfully adapt to shifting market dynamics will determine its long-term competitiveness in Asia’s evolving gaming and tourism landscape.

Read related article: Xi Jinping Wants Macau To Diversify Economy From Gaming