Las Vegas from the East, Monte Carlo of the Orient – Macau has been handed some pretty impressive nicknames over the past couple of decades or so, in which the gambling industry has completely exploded.
It’s now one of the most popular places on earth for punters to take a trip, rivalling the heavy-hitters of the Western world. As gambling enthusiasts ourselves, we’re fascinated by Macau and all it has to offer, so why not delve into the city’s history to find out more?
Portugal, World War II and Becoming a SAR of China
Before we get down to the gambling hub that it’s now well-known for, we’re going to detail a brief history of Macau to see how the seeds were sown for its current economic trail. From the mid-1550s up until 1999, Portugal was the ruler of Macau after the country established the region as a permanent overseas settlement.
Over the course of hundreds of years, the Portuguese overcame many obstacles – such as the Battle of Macau between themselves and the Dutch, tension with neighbouring China and World War II.
Despite being a neutral ground throughout much of the Second World War, Japan began relying on Macau during the later years. This caused conflict with Western forces and parts of the region were bombed as the war intensified. However, Japan would soon be defeated and the subject of ownership would be brought into question once the People’s Republic of China was formed.
After the Portuguese government was overthrown in the mid-1970s, the new revolution soon began to give up their foreign territories. 1987 saw the Sino-Portuguese Join Declaration signed which designated Macau as a Special Administrative Region (SAR) of China, with full control being handed over on 20th December 1999.
Macau as a Gambling Powerhouse
As all of this was happening, gambling was legalised by the Portuguese in 1850 and enjoyed moderate success. In 1962, a syndicate of businessmen from Macau and nearby Hong Kong (fronted by Stanley Ho) were granted the rights to all forms of gambling, creating a monopoly. Western-style casino entertainment, combined with better transport between Macau and Hong Kong, saw a boom in the industry, with any fears over Chinese intervention removed when no policy changes were announced.
However, in 2002, the government ended Stanley Ho’s dominance as the industry was opened up to other interested parties. Foreign investment has since seen over 30 casinos open their doors, including the largest in the world (and seventh largest building in the world), The Venetian Macao.
It is estimated that gambling generates close to 50% of Macau’s GDP, as foreign betters and Chinese nationals flocking to the area for a flutter and the luxurious lifestyle. Being the only region in China where casinos are legal, this has obviously attracted plenty of interest – so much so that Macau overtook Las Vegas for casino gaming revenue in 2007.
The Future of Macau and Gambling
Despite gambling being part of Macau’s culture for the best part of 200 years, going on to become a huge economic driver for the city, uncertainties about its future continue to grow. For starters, the gambling industry relies heavily on thriving Asian markets – especially mainland China’s which has slowed in recent times (not to mention the 2008 global financial crisis).
Furthermore, current president of China, Xi Jinping, has begun an aggressive anti-corruption policy which, for better or worse, has slowed growth. With global economies stuttering, many have predicted that the current Macau policy which focuses on VIP players/high-rollers is unsustainable.
Finally, although it’s probably a long way off from mainland China, online gambling has been rocketing in the last few years. With regulations being lifted in major areas around the world (including parts of the US), the threat to land-based casinos continues to grow. Macau’s gaming revenue had, until very recently, been on a very worrying 26-consecutive-month decline, proving that nothing is certain in the future of gambling.
We doubt that Macau would completely disappear from the map or anything quite as drastic, however the city will almost certainly need to adapt to the changes that are happening around it in the coming years.