The Growth Trend of Macau’s Gambling Industry: a Scenario Analysis

Zhonglu Zeng

Abstract


Macau’s gambling has been growing at a compound annual growth rate of more than 23% in the past 30 years. The growth was especially phenomenal in the last two years, with the growth rate of 58% and 42% respectively. The question is what will the future of Macau’s gambling industry be? Can the growth of the past be repeated in the future? This research will make a scenario analysis of the development of Macau’s gambling industry by studying the characteristics and changes of the visitors to Macau, the characteristics of the high rollers, and the future visitors’ propensity to gamble. The research finds that two opposite forces determine the future growth of Macau’s gambling industry: the upward forces and downward forces. The upward forces will drive the fast growth of Macau’s gambling industry. These forces include the increasing supply of visitors from the cities or provinces other than Hong Kong or Guangdong, and the increasing disposable income of the China’s population. The downward forces will slow down the growth of the industry. The downward forces include the adaptation effect and the learning effect of the gamblers, and the lower interest for gambling of the younger generation. In the short term, the upward forces will dominate the market, while in the intermediate term and the long term, the downward forces will be more powerful. The study is helpful for understanding the general trends of the casino industry in Macau as well as the casino industry in the world as a whole.