The Macau boom was largely built on VIP baccarat and junkets drawing high rollers to play. But given how Macau has now suffered its third straight revenue decline, gaming regulators are pushing casinos to get more revenue from slot machines, and less from VIP baccarat tables.
The Gaming Inspection and Coordination Bureau (DICJ), Macau’s chief regulatory body, has met with several slot certification firms, such as Gaming Laboratories International (GLI) Asia and BMM Testlabs (BMM). The goal of the meetings is to inform regulators on the latest and most-profitable trends in slots.
DICJ director Paulo Martins Chan wants Macau casinos to close the gap between slots revenue and VIP baccarat. Slot machines hauled in $2.9b Macanese patacas (US$363m) in the first quarter of 2016. But this was way off baccarat revenue, which brought in over 10 times this amount.
However, VIP baccarat has fallen 19.3% from Q1 2015, compared to slots, which dropped off just 1.7% during the same span. This is a big reason why Chan sees more potential in slot machines moving forward.
Macau has experienced pressure from the Chinese mainland to diversify their offerings so that they’re more like Las Vegas and won’t have to rely on VIP play so much. After all, relying on casino games only appeals to gamblers, rather than the families who like visiting Vegas for its broad range of offerings.
While more slot machines won’t solve this problem, Chan believes that they’ll at least attract a larger variety of gamblers. GLI and BMM have also pointed out that slots would help turn around Macau’s sagging revenue, which continues dropping along with VIP table play.
As Forbes reports, Macau is now in the third year of their slump, which began after a record-breaking year in 2013.
In the first six months of 2016, Macau’s gaming market shrank by 11.4%. This was fueled by an 18% decrease in the first half of the year. Last year as a whole saw Macau gaming revenue shrink by 34%, which spurred China’s call for diversification.
One thing that Macau has figured out is that VIP slots rooms won’t be the answer any time soon. The territory’s first VIP slots room at Jimei Casino has performed incredibly poorly.