{"id":14844,"date":"2019-01-03T04:12:54","date_gmt":"2019-01-03T04:12:54","guid":{"rendered":"http:\/\/www.lifeandnews.com\/articles\/?p=14844"},"modified":"2019-01-05T01:00:59","modified_gmt":"2019-01-05T01:00:59","slug":"how-macau-became-the-worlds-casino-capital","status":"publish","type":"post","link":"https:\/\/www.lifeandnews.com\/articles\/how-macau-became-the-worlds-casino-capital\/","title":{"rendered":"How Macau became the world’s casino capital"},"content":{"rendered":"

William Vlcek<\/a>, University of St Andrews<\/a><\/em><\/p>\n

Macau is China\u2019s answer to Las Vegas. But the former Portuguese colony has long surpassed the City of Lights as the world\u2019s casino capital, with revenue from gambling receipts exceeding the entire state of Nevada back in 2010<\/a>. As well as drawing in the punters, it has the glittering architecture to match.<\/p>\n

The story of Macau is one of globalisation and the rise of China<\/a>. It is a globalisation story because of the role played by foreign multinational casino companies. And it is a story of the rise of China because it has been the economic prosperity of its citizens that has allowed them in great numbers to travel, see the world, and gamble.<\/p>\n

Macau returned to Chinese rule in 1999 as a special administrative region, which means it has different laws to the mainland. It is the only part of Greater China (which includes China, Hong Kong and Macau) where gambling is legal, making it the country\u2019s sole gambling destination.<\/p>\n

In the years before the 1999 handover, the environment in Macau was fraught, with organised crime a violent presence competing for access to the sub-contracted VIP gaming rooms. These VIP rooms, which host high stake games in a private setting, are another dynamic behind Macau\u2019s success. They made the Macau gambling experience different from that of other casino destinations.<\/p>\n

\"\"
Macau makes its big money from VIP rooms.<\/span>
\nBenny Marty \/ Shutterstock.com<\/span><\/span><\/figcaption><\/figure>\n

Macau\u2019s focus on high-spending customers, with private rooms and special privileges \u2013 rather than mass market gamblers \u2013 is the source of much of the casinos\u2019 revenue. Casinos were originally built around VIP rooms. These were sub-contracted to gambling promoters who shared in the profits from bringing in wealthy gamblers. These high rollers made up 66% of total casino revenues in 2013<\/a>.<\/p>\n

International investment<\/h2>\n

Casino operations generate substantial tax revenue for the government: in 2001 it was 40% of all tax revenue collected<\/a>. Ten years later, government income from casino gaming taxes amounted to 81% of all tax revenue collected. This massive change is the result of the decision to open up the casino industry and invite foreign firms to compete for a casino license.<\/p>\n

Until 2001, only one company was licensed to operate casinos and for four decades this was monopolised by a company called Sociedade de Turismo e Divers\u00f5es de Macau, SA (STDM). From 2002, casino licences were awarded to several foreign multinational firms and joint ventures. This included big firms from Australia, Hong Kong and the US, with recognisable names from Vegas, such as Las Vegas Sands, MGM, Galaxy and Wynn Resorts.<\/p>\n

They invested heavily in big new casino resort complexes, with luxury hotels and high-end shopping malls. Given Macau\u2019s tiny size \u2013 it originally consisted of a mainland peninsula and two small islands measuring 11.6 square kilometres in 1912 \u2013 land reclamation projects were necessary to host the burgeoning industry. By 2010, the territory measured 29.7 square kilometres<\/a>, including six square kilometres of new land connecting the small islands of Coloane to Taipa, which plays host to the big casino complexes.<\/p>\n

\"\"
The Venetian Macao, modelled on the Las Vegas original, is the largest casino in the world.<\/span>
\njeafish Ping \/ Shutterstock.com<\/span><\/span><\/figcaption><\/figure>\n

These new casinos have provided some employment opportunities for local citizens, but the greater impact for the economy has been the tourist visitor numbers and the tax revenue generated. After a decade of ever-increasing growth in gaming revenue with the opening of new casinos, tax revenue from the sector peaked in 2014 and then declined after China\u2019s president, Xi Jinping instituted a widespread anti-corruption campaign<\/a>.<\/p>\n

The VIP gaming rooms in Macau became seen by the government in Beijing as a massive leakage of capital from the Chinese economy. A large part of the big money being gambled by these VIPs was seen as the proceeds of corruption and bribery on the mainland<\/a>.<\/p>\n

In 2014, gaming tax revenue provided 84% of the Macau government\u2019s total revenue; by 2017 it had declined to 79%. But these percentages conceal the decline in the actual amount available to the government, from US$20.1 billion in 2014 to US$15.7 billion in 2017<\/a>. This is because a number of Chinese elites eschewed Macau\u2019s casinos to avoid scrutiny<\/a> during Xi\u2019s corruption crackdown.<\/p>\n

Casino revenue now appears to have stabilised, helped by a move in Macau away from relying on the VIP sector and towards mass market entertainment. The government has also encouraged diversification beyond the casino gaming room and, like Las Vegas, it is looking to attract exhibitions and events to be held there.<\/p>\n

The new bridge<\/a> connecting Macau with Hong Kong should support increasing tourist visits by easing travel to the territory, further supporting diversification. But Macau must increasingly contend with neighbouring rivals. The anti-corruption campaign encouraged Chinese gamblers to visit other Asian casino destinations, including new resorts in Singapore and Manila in the Philippines.<\/p>\n

Modern Macau is built on China\u2019s rise and the increased wealth of its citizens that this has brought. Macau\u2019s continued success is contingent on its ability to attract the mass market gambler, along with other tourists, as a vacation destination. As China\u2019s middle class continues to grow<\/a>, it should guarantee a steady supply for years to come.\"The<\/p>\n

William Vlcek<\/a>, Senior Lecturer in Global Political Economy, University of St Andrews<\/a><\/em><\/p>\n

This article is republished from The Conversation<\/a> under a Creative Commons license. Read the original article<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

William Vlcek, University of St Andrews Macau is China\u2019s answer to Las Vegas. But the former Portuguese colony has long surpassed the City of Lights as the world\u2019s casino capital, with revenue from gambling receipts exceeding the entire state of Nevada back in 2010. As well as drawing in the punters, it has the glittering […]<\/p>\n","protected":false},"author":44,"featured_media":14841,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[277],"tags":[145,628,664,1115,492],"_links":{"self":[{"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/posts\/14844"}],"collection":[{"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/users\/44"}],"replies":[{"embeddable":true,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/comments?post=14844"}],"version-history":[{"count":2,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/posts\/14844\/revisions"}],"predecessor-version":[{"id":14853,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/posts\/14844\/revisions\/14853"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/media\/14841"}],"wp:attachment":[{"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/media?parent=14844"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/categories?post=14844"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/tags?post=14844"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}