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The casino scene in Macau

The low down on Macau’s most vibrant industry.

If America has Las Vegas and Europe has Monte Carlo, then Asia has Macau. A tiny 44 square mile former Portuguese colony on the Southern coast of China, Macau has gone from a busy trading port in the Far East’s hub for gambling.

When Portugal finally relinquished control in the 1980s then fully in 1999, just two years after the UK formally handed Hong Kong over to China, Macau became a Special Administrative Region. Like Hong Kong, it would become part of China, but with its own regional government and high level of autonomy.

This change of status quo left Macau at a bit of a crossroads. Unlike Hong Kong, Macau’s main streams of income came from the manufacture of textiles and clothing, as well as banking and finance services. This all changed when the existing gambling monopoly expired in 2002, opening up the door to foreign investment.

Macau had already seen rising numbers of tourists from Mainland China and other Far Eastern countries and with a sudden gap in the market, the biggest casino owners from Las Vegas moved in. From the Sands to the Wynn, an alternate-reality Las Vegas was built, complete with its own Vegas-style drag, known as the Cotai Strip. Thanks to casinos like the $2 billion Venetian, which contributes revenues up to $3 billion a year, Macau is the second most popular gambling destination on earth after Las Vegas, generating an estimated $28 billion in 2016.

A lot like Las Vegas, the gaming industry in Macau is built on tourism. Las Vegas was originally designed as an escape for Los Angeles-based wise guys, before the rest of the country realised how much fun gambling and drinking in the constant sunshine could be. Macau and Vegas are similar in that they are the only places (expect Hong Kong) in their respective countries where gambling is completely legal. China has enforced strict gambling laws since the Communist party took power and the US famously has a convoluted gambling system that is administered at state level, with multiple exceptions such as native casinos, as well as thriving underground gambling industry worth hundreds of billions of dollars.

This has caused a kind of legendary status to be given to Las Vegas. It still feels taboo for many American’s to be allowed to gamble in public, kind of like letting a kid loose in a sweet shop for the first time, and it isn’t too different in Macau. But there’s an even more important fuel being added to the fire in Macau, a phenomenon which already happened in Vegas over 30 years ago.

China is awakening from years of suppression, embracing capitalism along the way. The population of 1.379 billion people is currently experiencing the largest shift in class possibly ever seen, with a growing average wage and more successful Chinese businesses than ever before building a middle class with unseen purchasing power. And with purchasing power comes disposable income, the magic factor for any sustainable casino or gambling company.

As the European stag dos, American frat parties and dentists attending conferences flock to Las Vegas to create memories, so does a diverse range of Chinese and other Far Eastern nationals, pouring into Macau every weekend hoping to win big and enjoy a similar level of service and classiness found in the Nevada desert. The city is slowly becoming geared around the tourism and casino industry, with everything from the dozens of brands new hotels opening every few months to the brand new 34 mile bridge being built between Hong Kong and Macau that will make possible for Hong-Kongers to get to a casino within an hour. The casino industry is slowly exploding, despite rumours or slowing growth over the last year or so.

The potential for Macau to continue growing is absolutely massive, but there are murmurs that could upset the former colony’s dominance in the gambling world. As China experiences and cultural, economic and political awakening, more changes are happening in line with other countries around the world, with gambling becoming a more discussed topic as total freedom becomes more of a realistic prospect in a country that is famed for state control and a lack of social freedoms.

As the Chinese population gains more power, they want to gamble, buy a car and own a home, alongside other basic human rights like having multiple children and having access to healthcare and daily life that isn’t filled with corruption, all of which are still issues in China. Although legalised gambling across the country is likely to be very far off, other territories are throwing their hat in the ring to become gambling paradises, such as the island of Hainan, who got fairly close to being granted a license to operate a casino resort. If this pressure is sustained, then Macau could well have a competitor.

The biggest competitor could well be online gambling however. In the UK, one of the first countries in the world to fully legalise online gambling, the online industry now makes up over a third of all gambling profits. The taxes collected from this ever-growing industry are providing a benchmark to other states around the world, and with 4 in 10 adults now gambling online regularly in the UK, a country like China with well over a billion people is seeing the dollar signs behind a regulated online gambling industry. The best online casinos offer a huge range of virtual slot and table games, and it would be very interesting if they were in expand into a market like China, with a potential profit margin many hundreds of times greater than it is currently. Online casinos could see an almost endless supply of new customers ready to try their luck.

For the time being, Macau will retain its crown however. Legalised gambling in China is still a pipe dream and it seems that Macau’s casinos and Hong Kong’s horseracing tracks are enough to satiate Chinese gambler’s appetites for time being. Despite this, casino developers across the Pearl Delta will certainly be looking over their shoulders as China continues to become a more demanding and less closed country.

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Vagabond Journey scours the globe for the most interesting, informative, and straight up strangest stories out there.

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