Macau
Macau peninsula shows diversification strain like monoculture adaptation: gaming still provides 86% of government revenue despite decade-long efforts to broaden the economic base.
The Macau peninsula embodies the tension between heritage tourism and gaming dependency that defines the territory's diversification challenge. While Cotai's mega-resorts now generate most gaming revenue, the historic peninsula retains the UNESCO World Heritage Historic Centre and the original casino industry that preceded the 2002 liberalization. The government's "1+4" strategy targets reducing gaming's share from over 86% of government revenue to 40% by growing finance, traditional Chinese medicine, technology, and culture industries.
The peninsula's density constrains new development, pushing large-scale construction to reclaimed Cotai. Yet the historic core drives cultural tourism that the diversification strategy depends on. Per-visitor non-gaming expenditure projects at MOP 2,194 in 2025, with total non-gaming receipts forecast at MOP 85.5 billion. June 2025's performance surge came from concerts, cultural festivals, and promotional events rather than table games, validating the integrated resort model combining gaming with entertainment.
The numbers reveal both progress and limits. Gaming's GDP contribution fell from 86% pre-pandemic to 37.2% by 2023, but gaming still provided 86% of government revenue in the first half of 2025. GGR reached MOP 205.43 billion ($25.61 billion) through October 2025, up 8% year-over-year. The government revised its full-year forecast down to MOP 228 billion amid China's economic slowdown. Concessionaires committed MOP 118.8 billion to diversification under their 2023 license renewals, but industry experts call the 60% non-gaming GDP target by 2028 unrealistic. Macau's challenge is biological: reducing dependency on a single revenue stream that remains highly profitable while competitors in Singapore, Manila, and potentially Japan intensify pressure.