The entropy index is an indicator used in the academic community to measure economic diversity. Higher entropy index values indicate relatively less sectoral concentration in an economy, while lower values indicate relatively more concentration.
Table 3 shows a series of entropy index values of economic diversity, calculated from value added of different economic activities. As can be seen from the data series, after the liberalisation of the gaming sector, the sectoral concentration in Macao rose constantly between 2002 and 2013, and the trend began to reverse in 2014. Owing to a 34.3%
decline in gross gaming revenue in 2015, the entropy index based on value added of economic activities increased, indicating a slight drop in sectoral concentration. Subsequently, the entropy index edged up by 0.05 year-on-year in 2016, and inched down by 0.06 in 2017. This showed that the sectoral concentration in the economy in 2017 remained similar as in 2015 and 2016.
Table 3: Entropy index of economic diversity by the production approach
Value added of economic activities
2002 2007 2013 2014 2015 2016
r2017
At current producers' prices 2.25 2.04 1.49 1.61 1.87 1.92 1.86
At current basic prices 2.46 2.35 1.95 2.04 2.20 2.24 2.20
Note: r Revised figures
Source: Calculations based on data from DSEC
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3.2 Diversification of Gaming Activities
Among the various gaming activities in Macao, games of chance played the dominant role, with over 99% of the gross gaming revenue coming from games of chance. Gross revenue from games of chance reached MOP 360.75 billion and MOP 351.52 billion in the peak years of 2013 and 2014 respectively, and went down to MOP 265.74 billion in 2017. Revenue from football and basketball lotteries, horse racing, greyhound racing, Chinese lottery, instant lottery, etc. was insignificant, amounting to around MOP 864 million in 2017.
Table 4: Gross gaming revenue and the relative importance by type of activity
Gross gaming
revenue Share
Gross gaming
revenue Share
Gross gaming
revenue Share
Gross gaming
revenue Share (Million MOP) (%) (Million MOP) (%) (Million MOP) (%) (Million MOP) (%) Total 352 714 100.00 231 811 100.00 224 128 100.00 266 607 100.00 Games of Chance 351 521 99.66 230 840 99.58 223 210 99.59 265 743 99.68 Others* 1 193 0.34 971 0.42 917 0.41 864 0.32
2016 2017
2015 2014
Note: *Including football and basketball lotteries, horse racing, greyhound racing, Chinese lottery, instant lottery, etc..
Source: DICJ
Within games of chance, VIP gaming made up the largest share, accounting for over 60% of the gross revenue between 2012 and 2014, and approaching 70% in the peak year of 2012. The relative importance of VIP gaming dropped in recent years due to changes in internal and external factors. The share of VIP gaming in gross revenue from games of chance was 55.6% in 2015 and 53.5% in 2016, down by 5.0 percentage points and 2.0 percentage points respectively year-on-year. The corresponding share went up to 56.9% in 2017, an increase of 3.4 percentage points year-year-on-year.
On the other hand, the shares of mass market table gaming and slot machine gaming in gross revenue from games of chance registered growth in recent years. In 2017, gross revenue from mass market table gaming amounted to MOP 101.26 billion and that from slot machine gaming totalled MOP 13.16 billion, constituting 38.1% and 5.0% of gross revenue from games of chance respectively.
Table 5: Gross revenue from games of chance and the relative importance by type of activity
Gross revenue from games of
chance Share
Gross revenue from games of
chance Share
Gross revenue from games of
chance Share
Gross revenue from games of
chance Share (Million MOP) (%) (Million MOP) (%) (Million MOP) (%) (Million MOP) (%) Total 351 521 100.00 230 840 100.00 223 210 100.00 265 743 100.00 VIP gaming 212 890 60.56 128 271 55.57 119 519 53.55 151 315 56.94 Of which: VIP Baccarat 212 535 60.46 127 818 55.37 118 960 53.30 150 673 56.70 Mass market table gaming 124 188 35.33 90 815 39.34 92 307 41.35 101 264 38.11 Slot machine gaming 14 444 4.11 11 754 5.09 11 384 5.10 13 164 4.95
2017
2014 2015 2016
Source: DICJ
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Chart 5: Gross revenue from games of chance, 2002 to 2017
0 50 000 100 000 150 000 200 000 250 000 300 000 350 000 400 000
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Million MOP
Total VIP gaming Mass market table gaming Slot machine gaming
Chart 6: Changes in gross revenue from games of chance as compared to 2002
0 1 000 2 000 3 000 4 000 5 000 6 000 7 000
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
%
Total VIP gaming Mass market table gaming Slot machine gaming
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3.3 Diversification of Activities of Concessionaires Engaging in Games of Chance
The major indicators for measuring diversification of activities of the concessionaires engaging in games of chance are the gaming receipts and non-gaming receipts of the concessionaires, as well as the share of non-gaming receipts in total receipts. Excluding the services (e.g. accommodation, food & beverage, and entertainment) provided free of charge or at discounted prices by the gaming concessionaires to their customers, total receipts of the six gaming concessionaires amounted to MOP 284.77 billion in 2017. Receipts from gaming activities stood at MOP 265.44 billion (93.2% of total receipts), while receipts generated directly from non-gaming activities totalled MOP 19.33 billion (6.8%). Total receipts of the gaming concessionaires increased by MOP 43.76 billion year-on-year, with receipts from non-gaming activities rising by MOP 1.45 billion. Compared to 2014, non-gaming receipts grew by 26.8% in four years, whereas gaming receipts declined by 24.4%.
Table 6: Receipts from gaming and non-gaming activities of concessionaires engaging in games of chance and the relative importance
Amount Share Amount Share Amount Share Amount Share
(Million MOP) (%) (Million MOP) (%) (Million MOP) (%) (Million MOP) (%) Total receipts 366 442 100.00 245 839 100.00 241 010 100.00 284 767 100.00 Receipts from gaming activities 351 203 95.84 230 592 93.80 223 130 92.58 265 438 93.21 Receipts from non-gaming
activities 15 239 4.16 15 247 6.20 17 880 7.42 19 329 6.79
2016 2017
2015 2014
Notes: (1) Data on receipts from gaming activities are derived from gross gaming revenue figures listed in the annual reports of the concessionaires engaging in games of chance that are published on the Official Gazette. Slight discrepancies may occur when comparing with the data published by DICJ..
(2) Data on receipts from non-gaming activities take into account information of Macao subsidiaries and associates included in the annual reports of the holding companies listed in Hong Kong and the United States which wholly owned the concessionaires engaging in games of chance..
Sources: Annual reports of the holding companies listed in Hong Kong and the United States that owned the six concessionaires engaging in games of chance.
By taking into account the services provided free of charge or at discounted prices by the gaming concessionaires to their customers, total receipts of the six gaming concessionaires amounted to MOP 296.11 billion in 2017. Receipts from gaming activities stood at MOP 265.44 billion (89.6% of total receipts), and receipts from non-gaming activities totalled MOP 30.67 billion (10.4%). In 2017, gaming receipts increased by 19.0% year-on-year and non-gaming receipts rose by 15.0%; the share of non-gaming receipts in total receipts inched down by 0.3 percentage points to 10.4%.
Table 7: Receipts from gaming and non-gaming activities (after adjustment) of concessionaires engaging in games of chance and the relative importance
Amount Share Amount Share Amount Share Amount Share
(Million MOP) (%) (Million MOP) (%) (Million MOP) (%) (Million MOP) (%) Total receipts 376 467 100.00 254 499 100.00 249 814 100.00 296 112 100.00 Receipts from gaming activities 351 203 93.29 230 592 90.61 223 130 89.32 265 438 89.64 Receipts from non-gaming
activities
25 264 6.71 23 907 9.39 26 684 10.68 30 674 10.36
2016 2017
2015 2014
Notes: (1) Data on receipts from gaming activities are derived from gross gaming revenue figures listed in the annual reports of the concessionaires engaging in games of chance that are published on the Official Gazette. Slight discrepancies may occur when comparing with the data published by DICJ.
(2) Data on receipts from non-gaming activities take into account information of Macao subsidiaries and associates included in the annual reports of the holding companies listed in Hong Kong and the United States which wholly owned the concessionaires engaging in games of chance.
(3) Services (e.g. accommodation and food & beverage) provided to customers by concessionaires engaging in games of chance at discounted prices or for free are recorded as internal transactions of the enterprises in the annual reports of the listed holding companies and are not included in receipts. Receipts from non-gaming activities are therefore adjusted based on the retail values of the services provided.
Sources: Annual reports of the holding companies listed in Hong Kong and the United States that owned the six concessionaires engaging in games of chance.
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Analysed by type of gaming activity, receipts from guest rooms constituted the largest share of the total non-gaming receipts of concessionaires engaging in games of chance, at 40.6% in 2017; receipts from retail activities and rental of space kept rising year-on-year to make up the second largest share, at 25.0%; meanwhile, receipts from food &
beverage comprised 23.9% of the total.
Table 8: Receipts from non-gaming activities (after adjustment) of concessionaires engaging in games of chance and the relative importance by type of activity
Amount Share Amount Share Amount Share Amount Share
(Million MOP) (%) (Million MOP) (%) (Million MOP) (%) (Million MOP) (%) Total receipts from non-gaming activities 25 264 100.00 23 907 100.00 26 684 100.00 30 674 100.00 Guest rooms 10 694 42.33 9 842 41.17 10 886 40.80 12 465 40.64 Food & beverage 6 122 24.23 5 588 23.37 6 256 23.45 7 327 23.89 Retail activities & rental of space 5 219 20.66 5 350 22.38 6 303 23.62 7 668 25.00 Entertainment 1 109 4.39 1 068 4.47 1 137 4.26 918 2.99 Others 2 120 8.39 2 059 8.61 2 102 7.88 2 297 7.49
2016
r2017 2015
2014
Notes: r Revised figures
(1) Data on receipts from non-gaming activities take into account information of Macao subsidiaries and associates included in the annual reports of the holding companies listed in Hong Kong and the United States which wholly owned the concessionaires engaging in games of chance..
(2) Services (e.g. accommodation and food & beverage) provided to customers by concessionaires engaging in games of chance at discounted prices or for free are recorded as internal transactions of the enterprises in the annual reports of the listed holding companies and are not included in receipts. Receipts from non-gaming activities are therefore adjusted based on the retail values of the services provided.
Sources: Annual reports of the holding companies listed in Hong Kong and the United States that owned the six concessionaires engaging in games of chance.
Chart 7: Structure of receipts from non-gaming activities (after adjustment) of concessionaires engaging in games of chance in 2017
Guest rooms 40.6%
Food & beverage 23.9%
Retail activities & rental of space
25.0%
Entertainment 3.0%
Others 7.5%