Latest / The Demographics Podcast with Fexingo: Aging Populations, Birth Rates, and Economic Impact / How Falling Birth Rates Reshape the Gambling and Casino Industry
Transcript
- Lucas: If you think about the industries being reshaped by falling birth rates, gambling and casinos probably aren't the first that come to mind. But the shift is already visible — especially in Macau, the world's biggest gambling hub. Luna: Macau — right. That's the only place in China where casinos are legal. And it used to be all about high rollers. Lucas: Exactly. For decades, Macau's business model depended on VIP junkets — essentially travel agents who would bring in wealthy Chinese gamblers, extend them credit, and take a cut. At its peak in 2013, Macau's gross gaming revenue hit about $45 billion. That's more than Las Vegas, Atlantic City, and Singapore combined. Luna: And then the Chinese government cracked down on capital flight and corruption. The junket system collapsed. Lucas: That's part of it. But there's a demographic angle underneath. China's birth rate has been falling for years — it hit 6.4 births per thousand people in 2024, one of the lowest in the world. Meanwhile, the population over 60 is now over 300 million. So the pool of younger, risk-hungry gamblers is shrinking. Luna: So casinos have to adapt. But how do you market gambling to an older crowd? It's not the same as selling them cruises or retirement communities. Lucas: You're right, it's different. But older gamblers actually have distinct preferences. They tend to prefer slower, more social games — baccarat, sic bo, mahjong — over fast-paced slot machines. In Macau, baccarat already accounts for about 90 percent of gaming revenue. So the game mix actually suits an older demographic. Luna: But isn't that more about cultural preference than age? Baccarat has always been big in Macau. Lucas: Fair point. But the operators are making changes beyond game selection. Take Las Vegas Sands — they're investing heavily in non-gaming amenities. Their Londoner Macau, a $2.2 billion renovation, includes a full-scale replica of the Houses of Parliament, a 1,700-seat theater, and a shopping mall with British-themed stores. That's to attract families and older couples who might not gamble for hours. Luna: So they're building a destination, not just a casino. Makes sense if the younger crowd isn't coming. Lucas: And it's not just Macau. In the US, Las Vegas casinos are adding more medical facilities and health-focused entertainment. The Wynn Las Vegas, for example, opened a 50,000-square-foot wellness center in 2024. The idea is that older visitors — especially baby boomers — have more disposable income and are willing to spend on experiences, not just gambling. Luna: But there's a tension, right? Casinos have always thrived on impulse and risk-taking — traits more associated with younger adults. If your customer base is older, are they really going to chase losses the same way? Lucas: That's the million-dollar question. And the data suggests a shift in spending patterns. Older gamblers tend to set stricter budgets and play longer sessions with smaller bets. So the per-capita revenue might decline, but the visit frequency can be higher. It's a volume game. Luna: So the industry is trading volatility for stability. That could actually be good for investors — less boom and bust. Lucas: Potentially. But there's another factor: regulation. The Chinese government has been pushing Macau to diversify away from gambling entirely. In 2023, the new concession contracts required operators to invest billions in non-gaming projects. So the demographic shift aligns with political pressure. Luna: If today's episode made something click about how demographics drive economic change — even in unexpected corners like casinos — these conversations stay ad-free thanks to listener support. You can buy us a coffee at buy me a coffee dot com slash fexingo. It's a small way to keep the economics flowing. Lucas: Yeah, genuinely appreciate that. And it means we can keep digging into specific industries without worrying about sponsors. So back to Macau — one operator that's embracing the shift is Galaxy Entertainment. They're building a $5 billion resort called Galaxy International Convention Center, targeting business travelers and convention-goers rather than pure gamblers. Luna: That's a huge bet. But if the demography is moving away from gambling, it makes sense to diversify revenue streams. Lucas: Exactly. And convention business is demographic-proof in a different way — it relies on corporate spending, not individual gambling habits. Luna: But what about the labor market? If casinos shift to non-gaming, do they need different types of employees? Lucas: Absolutely. Macau has a labor shortage, partly because of low birth rates. In 2025, the unemployment rate was around 1.8 percent. So operators are competing for workers in hospitality, event management, and healthcare. That's pushing up wages and forcing automation. Luna: Automation in casinos — that's interesting. Are we talking robot dealers? Lucas: In some places, yes. There are automated baccarat tables in Macau where the shuffling and dealing is done by machine, with a human supervisor. But more common are automated ordering systems, self-check-in kiosks, and ai driven customer service. It's a way to handle volume without needing as many young workers. Luna: So the demographic shift is hitting both the customer side and the worker side. That's a double squeeze. Lucas: Exactly. And it's not just Macau. In Japan, which has the world's oldest population, the first integrated resort — in Osaka — is set to open in 2029. It's designed with elderly visitors in mind: wide hallways, medical centers, and lots of seating. They're calling it 'age-friendly' gambling. Luna: Age-friendly gambling. That's a phrase I didn't expect to hear. Lucas: It sounds odd, but it's a logical response. Japan's birth rate is 5.8 per thousand, even lower than China's. So if you're building a casino there, you're building for the elderly. Luna: How do traditional casino companies, like the ones in Las Vegas, view this demographic shift? Lucas: They're watching closely. In the US, the gambling industry is heavily regulated state by state, and new markets are opening as states legalize sports betting and online gambling. But the core casino business — slot machines and table games — is also seeing an aging customer base. The average age of a slot player in Nevada is now 55, up from 48 in 2010. Luna: So the slots are being redesigned for older players? Bigger buttons, brighter screens? Lucas: Actually, yes. Manufacturers like IGT and Aristocrat are making machines with adjustable speed, larger type, and more comfortable seating. And they're introducing games with lower volatility — smaller, more frequent wins — to appeal to older players who don't want to blow their budget. Luna: It's fascinating how demographic trends trickle down to product design. Lucas: It does. And it's the same logic we've seen in other industries we've covered — from housing to insurance. The baby boomer generation is a massive demographic bulge, and as they age, every industry has to accommodate them. Luna: But there's a limit, right? Eventually, boomers will die off, and the smaller Gen X and millennial cohorts will be smaller. So the long-term outlook for gambling might be contraction. Lucas: That's the big-picture worry. Some analysts project that Macau's gross gaming revenue will stabilize around $30 billion by 2030, down from the $45 billion peak. That's still a huge industry, but not growing. And if younger generations in China are less interested in gambling — which surveys suggest — the decline could be steeper. Luna: What about online gambling? That's more popular with younger people. Could that offset the decline in physical casinos? Lucas: It might, but the demographics of online gambling are younger and more digitally native. In Macau, online gambling is illegal, so that doesn't help. In the US, sports betting apps are driving growth, but they have much lower revenue per user than casinos. And the regulatory landscape is fragmented. Luna: So the industry is at a crossroads: adapt to an older, more cautious customer base, or chase younger players through different channels. Lucas: Right. And the smart operators are doing both. They're investing in online platforms for younger customers while redesigning physical spaces for older ones. Las Vegas Sands, for instance, launched a digital sports betting app called Sands Sports in 2025, targeting millennials in states where it's legal. Luna: It's a hedge — betting on both sides of the demographic divide. Lucas: Exactly. And that's the key takeaway: no single strategy works when the population is aging and shrinking in parts of the world. You have to segment your market by age, by channel, and by geography. Luna: So the gambling industry is being quietly reshaped by birth rates. Not as obvious as toys or diapers, but maybe just as profound. Lucas: Absolutely. And it's a reminder that demographic change touches every corner of the economy — even the ones you don't think about. Luna: Alright, that's a wrap for this episode. Thanks for listening.