The Recovery of Asian Gambling in 2021
After a tumultuous 2020 where revenues were significantly reduced, free movement of humans greatly hindered and internal reserves of cash all but dried up – we look ahead at the potential recovery path of the Asian gambling industry. The multiple dimensions of this story cover the economic, diplomatic, and human perspectives of Asia’s gambling industry in 2021. Read ahead if you’re looking to understand the significant forces at work over the next 12 months.
Irrespective of the major demand shock hitting the global gambling market during 2020, the industry has been poised for major structural changes since the mid-2000s. The age of the internet unlocked immense reach capabilities for casinos, no longer limited by the footfall capacity of their properties they have grown in size and power whilst scaling up their product offerings. With each new customer, the casino’s costs are not equally affected so this rise in fortunes has seen the world’s biggest companies secure enormous year-on-year profits since that transition.
Whilst the framework is very much in place to allow casinos to expand their business offerings in the age of COVID, navigating the new set of challenges posing the global industry has been tricky. The toughest challenge of all is the governmental red-tape applied to the industry, which differs significantly from country-to-country. This all means that globalized casino corporations with business interests in 50+ countries are constantly playing cat and mouse with an international plethora of regulators.
There are signs that this momentum is beginning to favor the casino industry. In lesser developed countries, and emerging markets the shift from prohibition to progressive enablement of gambling is the most pronounced. In these regions that have all been hit hard by COVID in an economic sense, governments are seeking new and quicker ways to raise tax revenues, gambling represents one of the strongest and most reliable sources to achieve that. Funding large scale fiscal rescue packages to subsidize workers’ salaries and boost economic activity comes at a cost, some of which the casino industry could help with.
Steps Being Taken to Adapt to New Reality
There is a large vested interest in the recovery of this industry, as the Asia Pacific region represented the largest segment of the global gambling business accounting for more than one-third of the market in 2019. Closely behind Asia was the North American region which has amassed approximately 29% of the global gambling business. In order to maintain this supreme dominance in the age of COVID, the Asian gambling industry has been forced to adapt and modernize.
The pandemic has forced industries across global businesses to adopt new strategies to reach customers that are no longer able to move freely across borders and into their luxury properties. Cash-less transactions are at the heart of this pivot, by leveraging socialization and mobilization trends the casinos across Asia have introduced a series of innovations to help players interface with the product in a more seamless way. New regulatory acts have also favored this growth trajectory, with Free to Play games proving a massive hit with punters, drawing in a more diverse range of customers to the industry.
Casino floors during the pandemic have looked like very different places, as wide-reaching logistical changes were enforced. In Australia, Crown properties imposed a headcount limit after re-opening, and in Macau the entrance procedure involved customers having temperature checks. The staff inside the venues have had to adapt, and glass partitioning, frequent sanitation of gaming areas, and PPE are all necessary requirements throughout the entirety of their shift.
The stop-start nature of the casino enterprise this year has meant that getting any momentum going has been difficult. Several innovations across the casino business have allowed the major players to continue bringing in revenues, as lockdowns forced the majority of regular players into the online medium. Pushing forward down this path remains the key to survival in the industry, as companies will need to rapidly innovate and bring in the clientele virtually when the government restricts physical access.
Macau Will Host a Tech Fair in 2021
The former Portuguese colony that has been transformed into the world’s largest gambling hub has announced plans to host a large tech fair in 2021. Similar events take place every year in Las Vegas, with Defcon and many others being featured highlights on the city’s calendar. This pivot towards business conferencing is seen by many as Macau’s step towards modernizing its customer base and bringing about a new age of internet gambling opportunities across the region.
Several high-profile parties are already publicly involved in the organization and delivery of the “Beyond” tech conference. Lu Gang the founder of a popular tech news website, TechNode, which is the former Asia partner of world-renowned TechCrunch is the face of this new project. Jason Ho is another name that continues to crop up in connection to the conference, he is a venture investor and entrepreneur with ties to the Macanese government and CPPCC Beijing, the top political advisory body in mainland China.
The event is effectively being endorsed by the Macau government and is a clear statement of intent in the city’s bid to modernize its gambling offering. In essence, the tech fair is just the tip of the iceberg in a series of events designed to diversify the revenue stream, which up until now is heavily reliant on land-based gambling products.
Working in its favor and essential to this smooth transition in business strategy is the excellent infrastructure already in place throughout Macau. With the entertainment and hotel industries have transformed the city’s transport capabilities over the past decade, Macau is in a great posture to offer more international conferences to its repertoire and potentially attract thousands of people to join.
It is already being billed by many analysts as a perfect moment and opportunity to bridge China with the rest of the world, this is especially possible given Macau’s neutral status in the geopolitical landscape. In Hong Kong which up until recently enjoyed similar freedoms, several tech conferences have already left the city with Rise relocating its event to Kuala Lumpur following a government crackdown against political dissidents in the former British colony. It could go one of two ways here, with the exodus from Hong Kong spelling big potential for Macau to fill the void, or they may face similar challenges if Beijing decides to tighten its control over the situation in Macau too.
In any case, the COVID pandemic continues to persist across most of the world. The success of these penciled in events depends entirely on the efficacy of vaccination programs being launched. Indeed the whole gambling industry in Asia and the rest of the world are desperate for the disease to be brought under control, so normal business can slowly resume.