The Chinese Island of Hengqin Could Soon Belong to Macau

Macau could be on the verge of receiving a large and expensive gift. Rumors are circulating that China may be preparing to give the city the island of Hengqin, which, should it happen, would give Macau greater flexibility as a global tourism hotspot. It could also, in theory, provide a boost to the city’s casinos.

Macau Might Get Its Own Island

According to Inside Asian Gaming, citing local media outlets in China, Hengqin could soon be “gifted” to Macau. It goes without saying that China wouldn’t make such a move without adding some caveats to the arrangement, but the island could be “given to Macau as a ‘gift’ or placed under Macau’s administration, either directly or in a joint arrangement with Guangdong province.” That province is adjacent to Macau and is its largest mainland feeder.

Some businesses and institutions in Macau, such as the University of Macau, are already active in Hengqin, having leased land there for their programs. In addition, some Macau casino operators also own land there. Galaxy Entertainment Group, one of six licensed operators in the city, is already said to be considering a luxury resort on the island. Shun Tak Holdings, a company with strong ties to SJM Holdings Melco International, has said it plans on building a resort there, as well. Those plans, however, may be on hold, as the company’s website lists the completion date as sometime last year.

Casinos Not Likely to be Added

Given the Chinese government’s aversion to gambling, bringing casinos to Hengqin isn’t a realistic expectation. However, there are some interesting possibilities worth considering. Macau, which greatly depends on tourism, needs new ways to boost visitation. 72% of the city’s GDP came from tourism in 2019, an amount that was not repeated last year during the COVID-19 pandemic. Things haven’t improved substantially this year, either, with the first half of the year showing hotel’s booked at an average of 50.4%. That’s a 23.2% increase over last year, but the return of the coronavirus could hamper efforts to regain ground in the second half of the year.

With that in mind, and with a decision on Hengqin “imminent,” Macau has a number of options. Casino operators are close to being considered for new gaming concessions, expected to be issued next year, and the city is currently revamping its gambling laws. It’s conceivable that, with the new laws and the requirements presented to operators, they will be tasked with expanding Macau’s operations on the island in exchange for a new gaming license. That obligation could come via financial or operational commitments, or potentially through administrative assistance, but casinos almost certainly won’t be included. There has not been any official announcement as such, but the idea is plausible if Macau wants to maximize the potential of its new gift.

New details should emerge soon, and Macau Chief Executive Ho Iat-seng has already stated that there will be an announcement in the coming weeks about expanded cooperation between Macau and the Guangdong province. Any announcement is likely a prelude to what’s coming for the city’s new gaming laws and concession negotiations, and there is still a lot of work to be done. It has already been suggested that the current concessions may be extended for as many as three years, and giving Macau a 39-square-mile island with which to work could make that extension a requirement.