Since the legalization of gambling in Macau in 1847, this city on the southern coast has evolved from local gambling houses to a monopoly franchise, and then to the influx of international capital. The newly revised "Gaming Law" of 2022 sets a limit of six gaming licenses, abolishes the sub-license system, and mandates that gaming companies invest more than 50% in non-gaming projects.
This regulatory change marks the official transition of Macau's gaming industry into an "integrated cultural and tourism" mode, with gaming no longer being the sole core. By 2025, the non-gaming industry accounts for 45% of GDP, with an annual growth of 21.8% in gaming service exports, showing early signs of success in its diversified development path.
Under the new regulatory framework, the six major gaming companies form a "tripartite" structure.
Starting in 2024, Macau has gradually closed many "satellite casinos," signaling turbulence within the industry. These small casinos, once spread across the peninsula and operating under the licenses of large gaming companies, have long played a crucial role in diverting Macau's gaming revenue. However, with stricter regulations and a restructuring of the licensing system, the new "Gaming Law" explicitly prohibits the transfer of operating rights, leading many satellite venues to lose their "legal cover" and subsequently shut down or lay off staff, with some smaller gaming companies completely exiting the market.
This purge not only reshapes the gaming landscape but also forces the main license holders to reevaluate their core resources and non-gaming transformation paths. In this battlefield of policy and market transformation, Macau's six major gaming companies are engaged in a deep structural contest—the future of the gambling city is being shaped from this moment on.
Galaxy Entertainment and Sands China dominate the mid-range and family customer segments with their large integrated resorts and Cotai land reserves; Melco International and MGM target the young market and high-end customers through technological innovation and cultural IP;
Wynn Macau and SJM Holdings rely more on traditional VIP room operations, seeking breakthroughs under policy pressure. Galaxy Entertainment has increased its non-gaming revenue share from 3% in 2012 to 14% in 2024 through the expansion of high-end villas and AI customer flow systems;
Sands China relies on "The Londoner Phase II" and the Cotai Expo to create a dual channel for families and business, reaching the highest non-gaming revenue share in the industry at 25%;
Melco International expands its young customer base with eSports rooms, VR gambling tables, and Southeast Asian projects, despite a 50% annual increase in online revenue, its debt ratio has risen to 88%;
MGM achieves a 227% increase in net profit through art exhibitions and cultural conferences, but its debt ratio exceeds 100%; Wynn focuses on high-end experiences, maintaining a VIP contribution ratio of 30%, but faces tightening regulations with a high debt ratio of 133.83%;
SJM Holdings, while revitalizing the historic city area around Grand Lisboa, still has the lowest non-gaming revenue share in the industry at 6.4%, but boasts a high-end hotel occupancy rate of 96%.
Strategically, Galaxy and Sands represent "high-end integrated" models, relying on scale and efficiency to dominate the market, but need to address the rise of new gaming destinations in Southeast Asia;
MGM and Wynn pursue a "vertical cultivation" approach, creating barriers with luxury experiences and art premiums, yet have weaker risk resistance;
Melco and SJM attempt a "tech-savvy young" transformation, with the former leading trends but exposed to Southeast Asian policy risks, while the latter is still constrained by traditional operational inertia.
In the future, Macau's gaming industry faces three core challenges: first, how to effectively direct non-gaming traffic to gaming consumption, such as improving Galaxy's convention conversion efficiency;
second, the test of international operational capabilities, with Galaxy bidding for a Thai license and Sands entering the Japanese market as critical tests;
third, policy adaptation capabilities, especially how SJM copes with declining peninsula traffic after the closure of satellite casinos, and how Wynn restructures its VIP setup. From an investment perspective, Galaxy and Sands represent the stable faction, with limited growth potential but abundant cash flow; Melco and MGM have high growth potential, with elastic valuations but need to be cautious of high debt; SJM and Wynn may have "distress reversal" opportunities, provided policy support and operational improvements can be implemented.
Macau's gaming industry transformation is at a critical juncture, with this shift from "gambling tables" to "tourism ecology" not just a structural adjustment for businesses, but a redefinition of the city's positioning. The outcome may depend on who can truly enhance efficiency with technology, build scale with cross-border collaboration, and find a balance between business and social responsibility under regulatory red lines.
