In casino gaming industry, income in Asia area ranks top around the

world. And more countries will legalize and deregulate casino gaming
⚫ The global gaming industry's revenues grew steadily, with ⚫ The gaming industry in the Macau has re-achieved high
Asia's revenue ranking first. growth rates from negative growth for 3 consecutive years.

Asia 139547 57%

North 42%
133663
America
19% 19%
Europe 10% 13%
118980
-3% -3%
Oceania 21099
2009 2010 2011 2012 2013 2014 2015 2016 2017

Africa 6541
-34%

Global Gains Unit for Gaming Industry in 2016 (Unit: Million US Dollars) Gross Income Growth Rate of Macao between year of 2009 and 2017

• The total revenue of the gaming industry in 2016 rose by 4.6% to US$450
billion, and is expected to maintain steady growth in 2017-2020.
• In 2016, the gaming market in Asia, North America and Europe all exceeded
100 billion US dollars, of which Asia's total revenue was the highest,
reaching 139.5 billion US dollars.
• Since 2014, the Macau gaming industry has experienced negative growth
due to many reasons such as cracking down on corrupt officials in China.
• In 2017, it finally re-achieve high growth rates. In the first half of 2018,
total gaming revenue in the Macau market increased by 18.9% from the
comparable period in 2017 to HK$145.8 billion.

⚫ In many Asian countries, especially Taiwan, Thailand and Japan, the policy environment will be good.
• In December 2016, a law which conceptually enables the development of integrated resorts in Japan took effect.
• Other countries, such as Taiwan and Thailand, may also in the future legalize casino gaming and may not be subject to as stringent regulation as the Macau
and/or Philippine markets.
Reference: http://www.chyxx.com/industry/201807/659889.html Page 1
Luxury hotel market is anticipated to expand at a CAGR of 4.3%
(2018-2023). Market in Asia-Pacific region has strong potential

⚫ The global luxury hotel market keeps rising. Asia-Pacific and China are key markets around the world

$171.10 billion
②nd
19.28%
③rd
18.73%
The global luxury hotel market size was Asia-Pacific ranked the second market China ranked the third market with the
valued at USD 171.10 billion in 2017 with the market share of 19.28% in 2017. market share of 18.73% in 2017

⚫ Driven by fast growth of tourism economies in Asia-Pacific, market in this area get strong potential

TRAVEL & TOURISM OCCUPANCY RATE MACAO MARKET

• The travel and tourism sector will The highest occupancy The Macao Government Statistics
contribute US$7,860 billion, or 10% rates in the world for and Census Bureau announced that
of global GDP. The sector will the luxury hotel the number of visitors to
account for 284 million jobs, which is 9.5% of industry are found in the Asia- Macao in the first half of 2018 reached 16.8
total employment, or one in eleven of all jobs Pacific region. In 2017, this million, an increase of 8.0% compared with
on the planet. geographic region was able to the comparable period in 2017. Visitors
average an occupancy rate of more generally come from neighboring regions of
The United States and China will than 68%. Asia, including mainland China, Hong Kong,
retain their rankings as the two
Taiwan, South Korea and Japan.
biggest travel and tourism economies in the
world.

Reference: Interim report of MGM China Holding Limited, Luxury hotel market global trend segmentation and opportunities forecast to 2023-2018. Page 2
 MELCO aimed at Macau, Philippines now to provide casino gaming, hotel
and resort service, and targeting more businesses in more countries
HISTORY AND DEVELOPMENT OF MELCO

2004 2006 2009 2011 2012 2016 2017 …

Incorporated Initial public Upgraded to trade on Acquired a 60% Acquisition of a majority Repurchased 155 • Melco International became sole • Developing Morpheus, the third
in Cayman offering of the Nasdaq Global equity interest in interest in the issued million ordinary majority shareholder phase of City of Dreams in Cotai
ADSs Select Market SCI share capital of MRP shares from Crown • Nasdaq ticker symbol changed • Bidding for the Japanese gaming
MAIN BUSINESS IN MACAU AND PHILIPPINES Asia Investments from “MPEL” to “MLCO.” license

City of Dreams--operated
approximately 475 gaming tables, 670
gaming machines, 1,400 hotel rooms and
suites, 25 restaurants and bars, 95 retail
outlets, three swimming pools and other
facilities.
Studio City --operated
approximately 290 gaming tables and
970 gaming machines. Net revenues
generated from Studio City amounted
to US$1,363.4 million, representing
25.8%, of our total net revenues.
Altira Macau-operated operated
approximately 100 gaming tables and
119 gaming machines, 215 hotel rooms,
several fine dining and other facilities.
net revenues amounted to US$446.1
million
City of Dreams Manila--operated
approximately 1,635 slot machines, 172
electronic gaming tables and 293 gaming
tables and other facilities. Net revenues
generated amounted to US$649.3 million,
representing 12.3%of our total net revenues.

Reference: MELCO Resorts & Entertainment Limited Annual Report 2017. Page 3
However, MELCO is faced with fierce competition in resources, brand
recognition, customer loyalty from local and international competitors
Compete with local and international competitors in * Local Competitor examples International Competitor example

Galaxy Macau Galaxy Hotel

With The completion of Phase 2 of Galaxy Macau
Resort, Galaxy Macau™ became one of the
Resort Size Diversified Brand Access to Capital world’s largest integrated destination resorts
Resources Recognition Owner: Macau Galaxy Entertainment Group
GEG is planning to develop a world class and
recreation destination resort on a 2.7 km2 land
The Parisian Macao JAPAN(2025) parcel on Hengqin adjacent to Macau.
A half-scale Eiffel Tower as one its landmarks.
With approximately 3000 hotel rooms, 170
shops and 56,000 sq feet of meeting space, a MGM Cotai
1,200-seat theatre. CYPRUS Opened in Feb 2018, the latest addition to
Owner: Las Vegas Sands Corporation the MGM portfolio in China. With around
An American casino and resort company 1,400 hotel rooms and suites, Asia’s first
based in Paradise, Nevada, US. Footprint and MACAU dynamic theater, and other facilities.
impact extends worldwide. Owner: MGM China Holdings Limited
Operating a portfolio of destination resort
Wynn Macau brands including Bellagio, MGM Grand,
With 2 iconic towers featuring a total of 1,008 PHILLIPINES Mandalay Bay and The Mirage.
rooms and suites, 8 casual and fine dining
restaurants, 2 spas, a salon and a pool.
Opened the Wynn Palace in Cotai in Aug 2016. Winford Mania Resort and Casino
Operated by: Wynn Resorts With 128 deluxe rooms, a 1000+ capacity ballroom,
As of 2018, the company has developed five a swimming pool, a gym, a coffee shop, retail out-
properties and was building a sixth lets, a helipad, and an eight-level parking space in a
MELCO International 22-storey hotel.
• A dynamic company that leads the field in the leisure and entertainment sector. Operated by: PAGCOR
• May develop different interests and strategies for projects in Asia which conflict Government-owned and controlled corporation
with MELCO’s current businesses. established through the Presidential. Third largest
contributor of revenue to the government
Reference: Wikipedia, MELCO Resorts & Entertainment Limited Annual Report 2017, Internet information. Page 4