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Beyond the Tables: Measuring the Impact of Non-Gaming Diversification on Casino Profitability in Macau

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  • Qizhou Luo

    (College of Business, University of Nevada, Reno, NV 89557, USA)

  • Shunfeng Song

    (College of Business, University of Nevada, Reno, NV 89557, USA)

Abstract

This study investigates the relationship between diversification and profitability in Macau’s gaming firms, offering quantitative evidence from the world’s largest gambling market. Compared to other major gambling hubs such as Las Vegas, Macau’s gaming companies generate higher revenues but exhibit significantly lower levels of diversification, highlighting an urgent need for strategic expansion beyond gaming. Drawing on governmental data and company financial reports issued from 2010 to 2019, this research employs a combination of case study analysis, linear regression modeling, and bootstrapping techniques. The findings reveal that an increased share of non-gaming business significantly enhances profitability metrics, including net profit margin, return on assets, and a firm’s profit share within the overall gaming market. These results offer valuable implications for the development of corporate strategies, regulatory frameworks, and future academic research.

Suggested Citation

  • Qizhou Luo & Shunfeng Song, 2025. "Beyond the Tables: Measuring the Impact of Non-Gaming Diversification on Casino Profitability in Macau," Tourism and Hospitality, MDPI, vol. 6(2), pages 1-20, May.
    • Handle: RePEc:gam:jtourh:v:6:y:2025:i:2:p:91-:d:1660617
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    References listed on IDEAS

    as
    1. Iskenderoglu, Cansu, 2025. "The value of diversification: ESG and investment in controversial industries," Finance Research Letters, Elsevier, vol. 76(C).
    2. Douglas M. Walker & Lonnie L. Bryant, 2011. "The financial returns to casino amenities," Journal of Gambling Business and Economics, University of Buckingham Press, vol. 5(1), pages 67-84, March.
    3. Stan Xiao Li & Royston Greenwood, 2004. "The effect of within‐industry diversification on firm performance: synergy creation, multi‐market contact and market structuration," Strategic Management Journal, Wiley Blackwell, vol. 25(12), pages 1131-1153, December.
    4. Ricardo C. S. Siu & William R. Eadington, 2009. "Table Games or Slots? Competition, Evolution and Game Preference in Macao's Casino Market," Journal of Gambling Business and Economics, University of Buckingham Press, vol. 3(1), pages 41-63, April.
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