Macau Struggles to Diversify Beyond Casino-Driven Economy

Macau, China — As Macau celebrates its 25th anniversary under Beijing’s rule, concerns grow over the city’s heavy reliance on its casino industry, which continues to dominate the local economy despite calls for diversification.

For boutique owner Suzanne Leong, the economic boom that once lifted Macau now feels out of reach. While the city reclaimed its title as the world’s top gaming revenue hub in 2024 following the pandemic, sectors like retail and dining are struggling.

“Macau may look prosperous, but many restaurants and retailers are suffering,” Leong shared, noting that tourist spending has shifted. Visitors now prefer budget-friendly options, and her store’s earnings have dropped 90% compared to its peak.

Dependency on Gaming Revenue

Macau’s casino boom began in 2002 when the government ended the monopoly of tycoon Stanley Ho, attracting multinational casino operators. By 2007, the city surpassed Las Vegas in gaming revenue.

While gaming-related taxes make up 35% of government revenue in Las Vegas, they account for 81% in Macau. Despite Beijing’s repeated calls for economic diversification, Macau remained heavily reliant on its casinos, described by politics expert Ieong Meng-u as an “easy win”.

President Xi Jinping, who is expected to visit Macau this week, ended the city’s junket industry — once central to attracting wealthy Chinese gamblers — through his anti-corruption campaign. Casino operators were only allowed to renew their licenses in 2022 after pledging $14.9 billion for non-gaming ventures, including theme parks and conference venues.

Efforts for Diversification

Macau officials are promoting sectors like tourism, financial services, and technology, but experts say competing in these industries will be challenging. Vitaly Umansky, a gaming analyst, stressed that growing these sectors requires attracting foreign talent and faster action from the government.

Casino operators have launched initiatives such as concerts, sporting events (including NBA pre-season games), and historical site revitalizations. However, industry consultant Ben Lee pointed out that these ventures deliver “paltry returns,” making casinos hesitant to invest more.

A Hopeful Future

Despite Macau’s challenges, Jose Carlos Matias, director of Macau Business magazine, remains optimistic, stating, “The doomsayers have been constantly proven wrong when it comes to Macau.”

Leong, who endured a difficult year, also remains hopeful: “I won’t leave Macau. I want to see it get better and better.” She emphasized the need to adapt, encouraging her children to “catch the moment.”