Will China Ever Expand Macau’s Vibrant Casino Scene?

The popular destination of Macau is one of the only serious rivals to Las Vegas in terms of gambling tourism. It has all the opulence of its Nevada counterpart, with stunning casino resorts and high-rolling players who fly in from across the world. Despite recent bumps in the road, Macau’s story has been a successful one. It’s shrugged off competition from other resorts to become one of the most-visited gambling destinations in the world – matching Vegas for the visiting population and handily beating it on revenue. Macau raked in $33 billion in 2017, which greatly outstrips the $6 billion reported in Vegas.

But Macau thrives on its own slice of land for the very simple reason that mainland China forbids this kind of extensive activity. Now that Macau has more than proved its worth, will the motherland see any benefit in expanding its reach?

Gambling driven underground

The current position on gambling in China effectively outlaws it, certainly in terms of online play which is completely prohibited. Residents are permitted to play in certain state-run lotteries – these are considered games of chance and are not therefore subject to any gambling regulations.

The two distinct exceptions lie on Macau and Hong Kong. These popular tourist destinations stand as incongruous beacons against the government stance on gambling, which has driven the practice underground right across the mainland. The obvious question is: would China and its economy benefit significantly if they were to follow Macau’s lead and make other types of gambling legal right across the nation?

Macau’s challenges

The rise of online gambling has provided many challenges to casinos in the physical world. Macau, Las Vegas, London and many other notable locations have had to ‘up their game’ in order to compete with the many attractions that the internet provides.

The real threat to brick-and-mortar casinos from their online equivalent comes from Live play. Live dealers are on hand for games such as Blackjack and Roulette, and players can interact with them in real time – providing the closest experience to physical casino play possible without being there. Clearly, when you add in the convenience that playing in the comfort of your own home can bring, it’s obvious as to why the likes of Macau now have some serious competition from their digital counterparts.

There is certainly an appeal to virtual casinos. There are no restrictions on physical space, meaning that online gambling sites can offer a huge range of games, catering to different niches. Online sites are also at the advantage of being able to create twists on popular games, giving their users even more choice. Take Slingo casino games for example, a hybrid of 75-ball bingo and a traditional slot machine, it would be near impossible to make this game available for visitors to land-based casinos, and this kind of flexibility is exactly how online gambling sites are gaining an advantage.

Adopt, adapt and improve

For some casino players, the thrill of playing in a bricks and mortar establishment will never be beaten – but even luxury resorts like Macau and Las Vegas cannot afford to be complacent.

In response to the rise of online play, existing casinos have been improved and extended while new buildings have been put in place. Las Vegas tourist sites are always reporting on the latest developments in an effort to improve footfall to their casinos. Last summer, the Golden Gate spread its casino floor into a neighbouring building, doubling the size of the gaming floor and adding 100 slot machines.

These measures appear to be working. At the start of November 2018, the news agency Reuters confirmed that Macau had posted its highest monthly revenue for four years. The numbers had risen by 2.6 percent year-on-year to a significant $3.38 billion – and it’s clear which sector was being credited for this increase: gambling.

A week-long national holiday was partly responsible while the incredible feat of engineering that is the Hong Kong to Macau sea bridge has also seen an influx of visitors. At the core of this phenomenon was one key area of Macau tourism – the casino.

Will China react?

The figures relating to casino play in Macau continue to astound. A report by CNBC predicts that by 2020, the GDP per person on the island will reach $143,000. The figures come from the International Monetary Fund (IMF) and, if correct, would put Macau ahead of both Luxembourg and Qatar, making them one of the richest regions in the world.

It’s said that Macau’s economic output is equivalent to that of China’s capital Beijing, so surely the parent nation would be looking to follow their lead.

A crackdown on gambling laws

However, the Chinese government no real sign of letting up on its strict gambling laws. Back in January 2018, it was reported that the country would usher in the Year of the Dog with a renewed crackdown on illegal gambling activities in the country and some four months later it was clearly living up to those promises.

The country seemed particularly concerned over the football World Cup in Russia. It’s one of the biggest draws for betting all over the globe, but China was quick to warn its citizens against a flutter.

In April, raids in the municipality of Chongqing saw 94 individuals brought to book for illegal gambling activities. Those raids took the total number of arrests in 2018 up to 453 and with stiff prison sentences waiting for some offenders, the authorities warned that they would not be easing up on their crackdown anytime soon.

What does the future look like for Macau?

Any Chinese citizen hoping for a relaxation in gambling laws was given a glimmer of hope in 2018, amid reports that the government was considering legalizing gaming on Hainang, an island location similar to Macau and Hong Kong. Alongside a wider plan to boost tourism to the destination, there was room for development, and to build casinos across the length and breadth of Hainang.

Moving forward to April, stories claimed that Chinese property developers were already banking on legalised gambling on the island as they looked to snap up likely casino locations but it seems that they may have to wait for any positive news. As 2018 draws to a close, there are no definite signs that gambling in any form would be allowed on Hainan, amid reports that the Chinese government had gone cold on the idea.

China therefore continues to wait for a time when its citizens can bet freely. That prospect remains a distant one despite Macau continuing to flourish, while underlining some obvious benefits to the Chinese economy as a whole.

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