Weight of gaming sector in Macau economy has continued to increase since 2016

The report, which has been published since 2016, seems to show that, despite calls by Macau and Chinese authorities to diversify the local economy, the share held by gaming and junket activities has continued to rise.

The largest share of value added by the gaming sector, valued at current producers’ prices, to the industrial structure of Macau was 63.1 percent in 2013; under the influence of both internal and external factors, the gaming sector entered an adjustment period in the second quarter of 2014, followed by a sharp decline of 34.3 percent in gross gaming revenue in 2015.

“As a result, the share of the gaming sector in Macau’s industrial structure went down to 58.5 percent in 2014 and 48.0 percent in 2015. The gaming sector regained stability in 2016”, the report noted.

Since then its share in the local economy went up to 46.7 per cent in 2016; then to 49.0 per cent in 2017 and then reaching 50.5 per cent in 2018, with almost MOP220.8 billion (US$27.4 billion) in gross value added.

In a distant second, in terms of gross value added, were renting & business activities with MOP41.9 billion, and still with their share in the local economy falling slightly to 9.6 per cent.

Nevertheless, the gross the value-added of non-gaming industries rose by 6.7 per cent year-on-year to MOP 216.31 billion, with the DSEC considering that the growth of the gaming sector – which rose 13.3 per cent to MOP220.8 billion in 2018 – helped drive growth in other industries as well.

In total, 2018 saw the gross value added of all economic activities rising by 9.9 per cent to MOP313.9 billion. Between 2015 and 2018, the total receipts of the major non-gaming industries grew by 6.8 per cent from MOP359.08 billion in 2015 to MOP 383.43 billion in 2018. However, receipts of the gaming sector rose by 30.6 per cent during the same period.

Among the service industries, the top three non-gaming industries having the largest growth in receipts were hotels & similar activities (+43.2 per cent), financial activities (+29.2 per cent) and real estate & business activities (+25.5 per cent).

Meanwhile, the entropy index, an indicator used in the academic community to measure economic diversity and where lower values indicate relatively more concentration in certain industries, went from 2.21 at current basic prices in 2017 to 2.19 in 2018.

The gaming sector monolith
In 2018, total receipts of the six gaming concessionaires amounted to MOP335.34 billion, of which 90.03 per cent came from gaming activities and 9.97 per cent from non-gaming activities.

Within the gaming sector, VIP gaming was said to account for over 60 per of the gross revenue between 2012 and 2014, reaching its peak at 70 per cent in 2012. The VIP sector weight went down to 53.6 per cent in 2016 and 56.9 per cent in 2017, reaching 55.0 per cent in 2018.

‘On the other hand, the shares of mass market table gaming and slot machine gaming in gross revenue from games of chance registered growth in recent years. In 2018, gross revenue from mass market table gaming amounted to MOP121.23 billion and that from slot machine gaming totalled MOP 15.05 billion, constituting 40.0 per cent and 5.0 per cent of gross revenue from games of chance respectively,’ the report noted.