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Macau will struggle to kick its gambling addiction

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Macau wants to kick its gambling habit. The Chinese region's tourism chief reckons resorts can generate 40 per cent of their revenue from beyond the casinos. It's a worthwhile goal for Galaxy Entertainment and its rivals, but lacklustre infrastructure, branding and bureaucracy stand in the way.

[HONG KONG] Macau wants to kick its gambling habit. The Chinese region's tourism chief reckons resorts can generate 40 per cent of their revenue from beyond the casinos. It's a worthwhile goal for Galaxy Entertainment and its rivals, but lacklustre infrastructure, branding and bureaucracy stand in the way.

The idea is to become more like Las Vegas, where conferences, nightlife and family-friendly fun make up two-thirds of the top line. Sin City crossed the 40 per cent threshold decades ago. In Macau, which pulled in $33 billion of gross gaming revenue last year, the comparable figure is just 12 per cent, according to Morgan Stanley.

Casino operators are game. Broader attractions help contend with competition from emerging markets and online gambling. Galaxy plans to spend about HK$45 billion ($5.7 billion) on facilities including a new arena and space for exhibitions. Sands China touts an arcade where visitors slay virtual-reality dragons. Melco International Development owns a Hollywood-themed property. Resorts are crammed with boutiques and restaurants.

For all their talk, though, local authorities could do more to help. Even in the wake of China's corruption crackdown – which squeezed gaming revenue – a five-year development plan for 2016 to 2020 aimed for non-gaming revenue of just 9 per cent.

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Despite the gambling hub's comfortable current-account surplus, transportation links are missing. A long bridge to Hong Kong airport is nearly finished, but other projects lag behind. Trains sit motionless on an unfinished railway linking the casino district to the old city centre. The cavernous Taipa ferry terminal is half empty, while its shabby, chaotic counterpart in Hong Kong jars with the glitzy destination.

Red tape also hinders efforts to roll out new services. Employers hesitate to hire industry pros with global experience, fretting over policies designed to protect local workers. Opening so much as a resort cafe requires permission from multiple agencies.

A relaxed approach to promotion beyond China, where Macau is pigeon-holed as a gambling hub, has failed to lure tourists with more varied interests. That confounds efforts to cultivate an array of attractions, like the many live events and recreational activities on and around the renowned Las Vegas Strip. To secure its future, Macau will have to double down on diversification.