Monaco and Macau’s partnership in the casino industry

Lea Hogg April 17, 2024

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Monaco and Macau’s partnership in the casino industry

Monaco, the world’s second-smallest country and the richest microstate, is known for its glamour, wealth, and the iconic Monte Carlo Casino. On the other side of the world, Macau, a special administrative region of China, has earned the title of the “Las Vegas of Asia,” boasting the world’s largest casino, operated by Galaxy Entertainment Group.

In a strategic move to attract Asian investors, Frederic Genta, Monaco’s Secretary for Attractiveness, Development, and Digital Transformation, (pictured above), recently visited Macau Genta’s mission was clear: to leverage the close relationship between Monaco and Galaxy Entertainment Group to pitch to investors in the Greater Bay Area, which spans Macau, Hong Kong, and nine cities in China’s Guangdong province.

In 2015, Galaxy paid a modest €42.4 million for a 5 percent stake in Societe des Bains de Mer (SBM), a Monaco government-controlled company that owns the Monte Carlo Casino. This investment marked the beginning of a fruitful partnership, with Galaxy and SBM collaborating on various ventures, from exploring new casino opportunities across Asia to co-sponsoring cultural exchanges between Monaco and China.

Monaco’s Secretary for attractiveness woos Asian investors

Genta’s visit to Macau was not just about courting big businesses. He also aimed to attract the ultra-wealthy whose riches are managed through so-called family offices. After spending two days in Macau, Genta crossed the Pearl River Delta for a similar round of meetings in Hong Kong, organized by Galaxy.

Monaco’s relationship with China is noteworthy. Despite geopolitical tensions, Monaco, which is not a member of the European Union, maintains better relations with China than some of its neighbours. In 2019, it became the first European country to roll out a 5G phone network using technology supplied by Huawei, a company that the U.S. and some of its allies have shunned on security grounds.

The partnership between Galaxy and SBM is seen as a major asset as Galaxy explores new markets. Casino operators in Macau and those seeking entry to places such as Japan, Thailand, and the Persian Gulf are under increasing pressure from governments to reduce their dependence on gambling revenue. Instead, they are expected to transform their businesses into “integrated resorts” offering more non-gambling attractions.

SBM, despite holding a monopoly in one of the world’s most famous gambling hubs, last year earned 68 percent of its revenue from non-gaming activities, mostly from luxury hotels. Monaco also hosts a legendary annual Formula One race and the regular Monte Carlo Tennis Masters tournament, attracting some of the world’s best players.

The collaboration between Monaco and Macau is a testament to the potential of strategic partnerships in the global casino industry. As Galaxy’s representative on the SBM board, Troy Hickox, aptly described Monaco, it is “essentially the world’s first iteration of the luxury integrated resort.” This partnership is a high-stakes bet that could redefine the future of the global casino industry.