Macao is becoming a city of sports and entertainment, Sands China CEO says, as President Xi urges diversification

Posted by Admin December 23, 2024 Sports

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Sands China CEO and President Grant Chum said Macao was diversifying its economy away from gaming to become “a city of sports and … a city of entertainment,” during Chinese President Xi Jinping’s visit to the city that concluded Friday.

In an interview on “Squawk Box Asia,” Chum cited a deal announced in early December between Sands China and North America’s National Basketball Association to play two NBA pre-season games in China.

“We’ll be bringing the NBA China games back to China, but this time in Macao,” Chum told CNBC’s Emily Tan. “We don’t want just to do a one-off event. We believe that a multi-year partnership, where we’re going to be playing these pre-season games over several years, is going to really bolster Macao’s positioning.”

The games are part of Sands China’s commitment to invest $4.5 billion into the city through 2032, of which “over 90% … will be in non-gaming investments,” said Chum.

Collectively, the six gaming operators of Macao — China’s special administrative region — pledged to invest nearly $15 billion to make its economy less dependent on gambling revenue. The operators’ gaming licenses were renewed in 2022 — albeit for 10 years, instead of 20 — after each promised to invest heavily in non-gaming projects.

But for some, the transformation isn’t coming fast enough.

In a speech in Macao Friday, Xi praised the special administrative region before setting forth “three expectations” of the city, including a request to “keep pace with the trends of the times,” while demonstrating “greater courage in reform and innovation,” according to a transcript provided by China’s State Council.

Xi also urged the city to make steps to attract more foreign talent, a sentiment echoed by Allan Zeman, non-executive chairman of Wynn Macao, Thursday on “Squawk Box Asia.”

Building Macao’s brand

Chum said Sands China has already delivered on one major project — the renovation of the 14,000-person Venetian Arena, formerly known as the Cotai Arena, in November.

“We invested over $200 million U.S. in the fundamental upgrade and renovation of the Venetian Arena,” he said. “This facility will be state-of-the-art, not just for exhibitions and conventions, but also live music concerts and also increasingly major sporting events.”

Macao needs to attract more outsiders, says Wynn's Allan Zeman

The Venetian Arena will host the NBA pre-season games starting in 2025. The first two games, between the Brooklyn Nets and Phoenix Suns, are set for October, NBA deputy commissioner Mark Tatum said earlier this month.

Chum said those games will increase Macao’s standing as a destination for major global events.

“We expect over time, this is going to build Macao’s brand equity,” he told CNBC.

Chum said Macao’s gaming revenue has recovered to about 80% of 2019 levels, while tourist arrivals — which he called “the single most important health indicator for the tourism economy” — reached pre-pandemic levels in August and October.

Friday marked the 25th anniversary since the British handed Macao back to China in December of 1999.

The NBA deal also marks the return of pre-season games to China for the first time since 2019. In October of that year, China abruptly ended an arrangement to broadcast pre-season games in the country over a tweet made by the then-general manager of the Houston Rockets, Daryl Morey, that expressed support for anti-Beijing protestors in Hong Kong.