MGM Resorts Says Macau’s Foreigner-Only Gaming Zone Plan Was a Clunker

MGM Resorts Says Macau’s Foreigner-Only Gaming Zone Plan Was a Clunker

Bill Hornbuckle, the CEO and president of MGM Resorts, claims that attempts to create gaming areas at Macau casinos that are exclusive to foreigners have failed miserably with foreign players.

Hornbuckle stated that the trial, which was supported by the government of Macau in December 2022, just didn't work, as was first reported by Inside Asian Gaming. Speaking on Friday at the JP Morgan Gaming, Lodging, Restaurant & Leisure Management Access Forum in Las Vegas was the CEO of MGM Resorts.

The zoning scheme was a part of Macau's effort to draw more foreign visitors to the gaming hub rather than those from Taiwan, Hong Kong, and the Chinese mainland. 

Macau had the chance to revise its gaming laws for the first time in twenty years at the time as it was starting its first retendering process for casino license holders.

 

They Found It Distasteful

The intention behind the creation of gaming zones exclusive to foreigners was to facilitate the adoption of a new tax structure. For bringing in a certain number of foreign tourists, operators are now eligible for a waiver of up to 5% of the 40% gross gaming income that the government otherwise receives.

Within the zones, auditors would be able to monitor the amount of money that international guests were wagering thanks to special gaming chips. At least that was the plan. 

Foreign visitors to Macau didn’t bite, according to Hornbuckle. The zones weren’t compulsory, meaning that overseas visitors could gamble on the main gaming floor if they wished. It was up to operators to encourage them to use the zones.

“When the new regs came out and the marketplace was asking for international business outside of Greater China … the only way to track that effectively, because it was a different tax bracket, was to put [foreign visitors] in independent private rooms. That means everyone from Thailand has to go over to a little room and gamble,” Hornbuckle explained.

“They didn’t like it,” he said, adding that no one wants to be “isolated and told where to go.”

 

RFID Is the Solution

According to Hornbuckle, MGM's choice to equip its Macau casinos with radio-frequency identification (RFID) chips allowed for the tracking of foreign players' chips without requiring player segregation.This is part of the reason Melco Resorts & Entertainment and Galaxy Entertainment recently revealed that they plan to add RFID technology to their table games. 

91% of tourists to Macau in prepandemic 2019 were from Taiwan, Hong Kong, and the Chinese mainland. Only 3.58% of the casino hub's gaming earnings were thought to have come from overseas visitors.

For an extended period, the Chinese government has insisted that Macau broaden its tourism industry by drawing in foreign tourists and expanding its non-gambling facilities. For operators to receive new licenses, they have to commit billions of dollars toward this ambition.