Macau Casinos Feeling Pressure From Floating Hong Kong Gambling Boats
With nearly $38 billion in revenues last year, Macau is the largest gambling market on the planet. Being the only place where mainland China’s gamblers are permitted to gamble, Macau continues to report steady growth rates. While a large percentage of gamblers are VIP clientele there is a need to provide less wealthy Chinese punters the chance to enjoy the glitz and glamor of gambling.
Currently the price of a room in Macau is more expensive than a room in Vegas with estimates running at about $175 in comparison to the $108 in Vegas.A room on a Hong Kong boat can cost as little as $52. It is here where a new gap in the Chinese Gambling market has opened up and is increasing in size.
Gambling boats are becoming an alternative to the expensive Macau casinos. The way it works is that the floating casinos sail about an hour from Hong Kong into international waters where the gambling then starts. For many Chinese with less disposable income, the opportunity to solely gamble in an affordable manner is more than enough to satisfy their needs. The other luxury amenities offered by Macau casinos are not essential to their overall gambling experience.
The figures speak for themselves with visitors on the eight casino boats leaving Honk Kong rising by 9% in the first half of the year. Gambling boat operators like Success Group Ltd. and Genting Hong Kong Ltd. Have recorded excellent profit increases with Success Universe doubling their profits from their casino ship to $277,000 in the first half of the year.
By providing a viable alternative to Macau’s land casinos, these floating gambling boats also enjoy tax benefits. They pay no taxes on their receipts which is in contrast to the 39% levy imposed on Macau’s casinos.
The casino operators correctly argue the point that the increasing competition from the gambling boats does not currently have a major impact on their business but should they continue to grow these floating casinos could torpedo Macau’s casino industry.