Macau is the gleaming capital of global gambling that has long since surpassed Las Vegas and taken resort gambling into a different league.
Once, and it seems so long ago now, the name synonymous with gambling was Las Vegas. It had followed on as the leading light in the gambling world from the Lebanon of the sixties and the Monte Carlo of the seventies. Las Vegas was the jewel in the international gambling’s crown, it glittered and shone in the desert with a whole culture of mythology built up around it. What happens in Vegas, they said, stays in Vegas. But of course it didn’t, gambling has spread in the states, and big glitzy casino complexes have followed the money.
Macau sits on the coast of China, an irregular peninsula that is small enough to fit inside Washington DC six times over, yet it generates nearly $50 billion dollars a year in gambling revenues mostly from visiting Chinese mainlanders. With over 90% of its revenue coming from bacarrat alone, this is a very Chinese orientated gambling mecca, but it has attracted high-rollers and tourists from all over the world making it surpass Las Vegas in scope, scale and atmosphere. The zeitgeist has moved on, it has moved east.
Macau Eastern Promise Made Real
• Unarguably the gambling center of the world today
• A resort that could be a threat to even mobile betting
• In the year prior to July 2014 gaming revenues were $47. 89 billion
Macau had long been a haven for sailors escaping bad weather, and indeed had a small population of fishermen and the like, but it was people running from murder at the hands of their fellow humans were actually the basis of this community. The first 50,000 residents arrived having just fled the encroachments of invading Mongols, and the peninsula’s inherent defensible nature allowed them to both survive and then thrive over many centuries.
However it was Portuguese colonization that had the most profound effect and that was set up after the Portuguese had first arrived, pillaged and looted quite a bit, been massacred by a very angry Chinese administration who then gave the few survivors Macau as a colony perhaps gambling news of the massacre would keep them in line. For a while they prospered trading with Japan but then a malaise set in that lasted nearly 200 years.
Whilst gambling per se had long been legal in the colony gambling as a business was first introduced in 1962 via a government licensed monopoly which went a long way towards creating the infrastructural potential taken advantage of today. The ferry service between Hong Kong and Macau bringing in much needed tourism from the international airport – Macau only got an international airport of its own in the late nineties. However there were always going to be strains as Communist China came to terms with the colonies on its doorstep.
It would be the mid-seventies Carnation Revolution in Portugal that would seal Macau’s fate as the process of decolonization demanded its return to Chinese sovereignty and all the inherent and complex difficulties that came with it. It took another twenty five years for it to happen but in 1999 Macau returned to the Chinese fold, albeit as a “Special Administrative Region” with a high degree of autonomy, but this wasn’t the end of an era, far from it, this was the start of an explosion.
The 2002 removal of the gambling monopoly that had been handed to Sociedade de Turismo e Diversoes de Macau led to a period of expansion and construction almost unequaled anywhere in human history. In a period of just a few years huge resorts were constructed by the experienced old hands from Vegas who invested billions to be part of this lucrative market. The Las Vegas Sands Corporation, the Galaxy Entertainment Group, MGM and Wynn Resorts were all represented and have presences on the peninsula.
The massive Venetian has 3000 suites and enough floor space to park 100 Boeing 747s, and in the future even this will be surpassed by some of the largest commercial building projects in the world continuing even now. This has allowed Macau to enjoy one of the lowest unemployment rates in the world, running at just less than 2%, and a prosperity that has turned this former slave trade outpost into one of the most vibrant cities in the world today.
The limit on the amount of currency Chinese citizens can enter and leave the region with has always hampered completely unfettered trade but the Chinese punters get around this by using Junket operators who organize travel and credit expecting repayment on one’s return to China proper. Unfortunately gambling debts aren’t legally binding in China (where there is no gambling apparently) so these junkets tend to guarantee their loans on people’s kneecaps.
On their arrival in the region the western Casino operators actually balked at doing business with Junket operators disliking their history of criminal connotations, which coming from a bunch of Vegas veterans is a bit rich, but since then have allowed people who like to bet on sports in Macau to use these operators, some Casinos have even begun lending to them. This might cause some friction with the Chinese authorities, and recent events seem to indicate it has.
The investigation announced by President Xi Jinping into possible infringement of Chinese gambling laws, anti-corruption laws and fiscal propriety regulations has not done Macau any favors. It has chased away a good many people who wish to avoid involvement with the authorities of any variety, many of them extremely rich, but there have been crackdowns before and these have never lasted long in the grand scheme of things. Given the taxes involved, it’s wasteful to do anything but make a temporary show of tackling the issue.
Of course that isn’t the only issue Macau faces. The imposition of a new smoking ban is likely to have a small but significant effect on business as will the continuing protests in Hong Kong that are already having an impact on the tourist trade from across the water, plus Casino staff seem intent on gaining higher wages and better benefits through sporadic industrial action. All in all Macau’s rosy future just can’t come soon enough.
There is no doubt that Macau has long since taken on the mantle of gambling capital of the world, it’s bigger, more profitable, more modern and continues to expand and develop. Certainly recently there have been signs of a small decline in operating turnover, but this is unlikely to be a long term trend, and it if is, Macau will (being wholly dependent upon the industry) collapse in a manner that will make Atlantic City look like a picnic, something China most particularly (as well as those western investors) will be all too desperate to avoid.