Macau CEO Lawrence Ho Promotes Joint Efforts Between Macau and Hengqin Regions
Lawrence Ho, CEO of Melco Resorts, proposes a strategy to aid Macau's government in broadening its economic portfolio. The administration aims to incorporate more leisure tourism and special events into its revenue stream.
In November, Macau issued fresh 10-year gaming licenses to its commercial casino operators, with Melco being one of the recipients. Through fresh tendering, the local government requested significant investments in non-gaming facilities from the gaming companies. This move aims to decrease the Chinese Special Administrative Region’s (SAR) dependency on casino gambling.
Melco's non-gaming obligation is a minimum of MOP10 billion (US$1.24 billion). The parent companies of City of Dreams, Morpheus, and Studio City said the spending will focus on amenities that attract more foreign visitors to the casino district.
Melco intends to construct additional convention space, entertainment venues, and sports facilities, as well as expand the gaming firm’s health and wellness services. The casino operator will also create arts and cultural attractions, new dining options, and maritime excursions.
Cross-Border Alliance
Being a compact gambling haven spanning approximately 46 square miles, Macau finds itself limited in terms of undeveloped available acreage, primarily in downtown Macau and the Cotai Strip. Ho believes that the Macau government should foster a more enticing cross-border partnership with Hengqin Island.
Hengqin is a prefecture-level city in the Guangdong Province’s Special Economic Zone. Hengqin has been suggested for development that would support the non-gaming expansion of Macau’s casinos for many years. Macau is the sole location in China where casino gambling is permitted.
Portions of Hengqin have been leased to Macau by the People's Republic of China since 2009. However, a tedious visa process when traveling between the Macau SAR and Hengqin has stalled substantial development.
Ho proposes that China and Macau establish a less stringent border policy between the neighbors. He presented his ideas this week before China’s National People’s Congress in Beijing. Ho suggested creating a “cross-border agreement” that allows “borderless travel” between the casino enclave and Hengqin Island.
The billionaire also proposed allowing the casino hub’s non-gaming spending requirements to be invested in Hengqin. Accessible from the Cotai Strip via the Lotus Bridge, Hengqin is home to the Hengqin Checkpoint, which opened in August 2020. The infrastructure is designed to handle the daily passenger flow of over 220K entries.
Billions at Stake
Melco Resorts’ approximately $1.24 billion non-gaming investment requirement represents a fraction of the approximately $13.5 billion the Macau government mandates. Over the course of their 10-year licenses, the six casino operators must invest that amount in non-gaming projects.
Macau divided the non-gaming spending based on each licensee’s gaming market share. Sands China, a subsidiary of Las Vegas Sands, and Hong Kong-based Galaxy Entertainment were the top casino operators in Macau last year. Each company must allocate approximately $3.5 billion towards non-gaming developments.
Sands is concentrating on upgrading its MICE (meetings, incentives, conventions, and exhibitions) facilities, as well as creating a garden-themed conservatory and expanding its casinos’ entertainment and sports facilities. Sands manages properties such as The Venetian, The Plaza, The Londoner, Sands Macau, and The Parisian.
Galaxy announced plans to construct a “high-tech amusement park” incorporating “multimedia, interactive, and multi-sensory technologies” into games and rides. Galaxy oversees Galaxy Macau, Broadway Macau, StarWorld Hotel, and the Waldo Casino Hotel.
