Legalization of Gambling at Macau
Since the Portuguese government legalized Gambling in the autonomous colony of Macau in the 1850s, it has been permitted. Since then, Macau has become known worldwide as the “Gambling capital of the world” or “Monte Carlo of the East”.
Gambling tourism is Macau’s most important source of revenue, accounting for roughly half of the local economy. The majority of visitors come from mainland China and Hong Kong. Macau surpassed the Las Vegas Strip in gambling revenue in 2007 thanks to the entry of large foreign casinos from Las Vegas and Australia.
Until the introduction of Western-style casino games in the twentieth century, only Chinese games were played, the most popular of which was Fan-Tan. In general, gambling in Macau can be divided into four categories: casino games, greyhound racing, sports betting, and lotteries. Macau does not currently license online gambling operations.
Macau, a special administrative region similar to Hong Kong, is the only place in China where casinos are legal, and the industry has grown at an astounding rate since 2001, when the government ended Hong Kong billionaire Stanley Ho’s four-decade gambling monopoly.
Macau is the world’s preeminent gambling capital, grossing the most gambling/gaming revenue and dwarfing all other gambling centers/cities.
In order to generate revenue for the government, the Portuguese government legalized gambling in Macau in 1849. The government established a licensing system for fantan houses in the late nineteenth century (Chinese gambling houses). According to reports, over 200 gambling establishments were required to pay gambling rent to the administration. In 1937, the Tai Heng Company was granted the second casino monopoly concession. However, the company was too conservative to fully capitalize on the economic opportunities of gambling.
A significant turning point for the industry occurred in 1962 when the government gave Sociedade de Turismo e Diverses de Macau (STDM), a group of businessmen from Hong Kong and Macau, the exclusive rights to all forms of gambling. The STDM introduced Western-style games and modernized marine transportation between Macau and Hong Kong, bringing millions of Hong Kong gamblers each year. The license was extended for another 15 years in 1986, but it expired at the end of 2001.
In 1999, Macau was given to the People’s Republic of China and turned into a special administrative region of that country. There were no changes to Macau’s gambling policy during this transition.
In 2002, the Macau government abolished the monopoly system by awarding three (later six) casino operating concessions (and sub concessions) to: Sociedade de Jogos de Macau (SJM, an 80% owned subsidiary of STDM), Wynn Resorts, Las Vegas Sands, Galaxy Entertainment Group, the partnership of MGM Mirage and Pansy Ho Chiu-king, and Melco and PBL. The Sands Macau casino opened on May 18, 2004, near the Macau Ferry Terminal. The STDM now operates 16 casinos, which are still important in the Macau casino industry.
Economic Aspects
Macau’s economy is heavily reliant on gambling. The gambling industry now accounts for more than 40% of Macau’s GDP. Since the early 1960s, gambling has accounted for roughly half of Macau’s official revenue. Until the late 1990s, the percentage remained constant. The direct tax on gambling generated 44.5% of total government revenue in 1998. Then there was a 9.1% drop in 1999, most likely due to internet gaming. Following the handover of Macau from Portugal to China, the SAR granted gambling licences to other companies in order to break the STDM’s monopoly. The government signed concession agreements with two Macau gaming companies, Wynn Resort Ltd. and Galaxy Casino, in 2002. This increased competition in the gambling market and significantly increased government tax revenue. It also increased the number of visitors to Macau. Official statistics show that gambling taxes currently account for 70% of Macau’s government revenue.
The gambling industry, however, also contributes to economic instability in Macau because it is not a sector that can benefit from increased productivity or technological advancement. The gambling industry is still heavily reliant on the health of other Asian economies, particularly China’s. Because of Xi Jinping’s promise to crack down on corruption throughout mainland China, casino profits in Macau have been declining. Furthermore, the region’s proliferation of other gambling venues is driving away the target demographic. According to Fitch Ratings, Macau’s 2018 revenue increased 13% over the previous year, trailing the 41% growth in emerging casino markets in Singapore, South Korea, the Philippines, and Australia. Casino earnings fell to their lowest level in three years in 2019.
Macau’s revenue fell by 56% in 2020, and the monthly number of visitors fell from around 3 million before the COVID-19 pandemic to less than 1 million in 2021. The unemployment rate rose from a decade-long average of 2% to 4.6 percent in the first quarter of 2022.
How Macau became the world’s casino capital
Macau is China’s equivalent of Las Vegas. However, the former Portuguese colony has long surpassed Paris as the world’s casino capital, with gambling receipts exceeding the entire state of Nevada in 2010. It not only attracts punters, but it also has the glitzy architecture to match.
Macau’s story is one of globalization and China’s rise. Because of the role of foreign multinational casino companies, it is a globalization story. And it is a story about China’s rise because its citizens’ economic prosperity has allowed them to travel, see the world, and gamble in large numbers.
Macau was returned to Chinese rule as a special administrative region in 1999, which means it has different laws than the rest of the country. It is the country’s sole gambling destination because it is the only part of Greater China (which includes China, Hong Kong, and Macau) where gambling is legal.
Prior to the 1999 handover, the environment in Macau was volatile, with organized crime waging a violent war for access to the sub-contracted VIP gaming rooms. Another factor contributing to Macau’s success is the presence of VIP rooms, which host high-stakes games in a private setting. They distinguished the Macau gambling experience from that of other casino destinations.
The majority of the casinos’ revenue comes from Macau’s focus on high-spending patrons with private rooms and special privileges rather than mass market gamblers. Originally, casinos were built around VIP rooms. These were subcontracted to gambling promoters, who were compensated for bringing in wealthy gamblers. In 2013, these high rollers accounted for 66% of total casino revenue.
Famous Casino’s at Macau
Macau has 41 casinos (as of 2019), the largest of which is The Venetian Macao. There are 24 casinos on the Macau Peninsula and 17 in Cotai. They are all run by the government and follow the same set of rules.
SJM Holdings, Galaxy Entertainment, and Las Vegas Sands are the three largest casino operators in Macau, with revenues of 9.7, 4.8, and 4.2 billion in 2011.
There are numerous games to choose from, including roulette, blackjack, baccarat, boule, Sic bo, Fan Tan, keno, and slot machines.
Poker was first offered in an electronic table format at Galaxy Star world casino in August 2007. The Asia Pacific Poker Tour Macau event in November 2007 was the first live poker tournament.
Shortly after, in January 2008, the Macau government published the official rules for Texas hold’em poker games in Macau. Grand Lisboa Casino added the first live-dealer cash game tables in February 2008. ‘PokerStars Macau’ opened in May 2008 at Grand Waldo Casino. Texas Hold’em Poker debuted at Wynn Macau in November 2008. In March 2009, ‘PokerStars Macau’ relocated to the Grand Lisboa Casino. Live-dealer cash game poker tables are now available at Wynn Macau, Star World, and the Venetian. Previously, the majority of casinos were non-smoking. Both operators and visitors were extremely dissatisfied as a result. In 2019, the Chinese Ministry of Health permitted smoking in designated areas of most casinos. After a two-week break, in February 2020, in response to the spread of coronavirus, restrictions were imposed in the casino.
Here is the list of some famous casinos in Macau:
1. The Venetian Macao
Vegas Sands, is also the world’s seventh-largest building by floor area.
The casino, which is based on its sister property, The Venetian Las Vegas, offers eye-watering amounts of luxury gaming, including not less than 640 gaming tables, 1,760 slot machines, 3,000 guest suites, and more than 30 restaurants, ranging from Michelin-starred fine dining to cozy bars and cafés.
2. Wynn Palace
Wynn Palace, owned by international resort developer Wynn Resorts, has 1,706 exquisitely furnished rooms, suites, and villas, as well as versatile meeting facilities and over 106,000 square feet (9,800 m2) of luxury retail.
It’s not for nothing that Wynn Palace is the world’s first and only resort with more than 1,000 rooms to receive the Forbes Travel Guide Five Star Award.
The Wynn has over 1,000 slot machines and live table games, including 350 gaming tables with roulette, blackjack, and different poker variations.
3. Grand Lisboa
The Grand Lisboa, which opened on February 11, 2007, is Macau’s tallest building and a prominent feature of the city’s skyline.
This casino is notable for being the first in Macau to offer Texas hold’em poker ring games and craps, though the game is now available at several other Macau casinos.
There are over 230 gaming tables and 880 slot machines at the casino. The poker room hosts Asia’s largest and most popular poker tournaments. Its rewards programme is widely regarded as one of the best in Macau.
4. The Parisian Macao
This Parisian-themed resort is the fourth project from Las Vegas Sands subsidiary Sands China on the Cotai Strip. It has a half-scale replica of the Eiffel Tower, as well as French-themed architecture and décor.
The hotel has approximately 2,700 rooms, 170 shops, and 56,000 square feet of meeting space. The casino has 400 tables with popular games like baccarat and roulette, as well as slot machines with minimum bets ranging between $0.10 and $2.
5. MGM Cotai
This $3.2 billion casino and resort is shaped like a jewelry box. Inside, luxury and art can be found in abundance.
With 177 gaming tables (12 for VIP customers) and 1,500 slot machines, the casino occupies less than 10% of the total floor space. Classic games such as baccarat, blackjack, craps, and roulette can be found here.
It also offers MGM Stud Poker, which is identical to regular Caribbean Stud Poker except that players can wager up to $125 and win more money if they get four of a kind, a flush, or a straight rather than a flat $25 on the progressive side bet.
6. Sands Macao
The Sands Macao casino is a true gaming haven, complete with critically acclaimed restaurants and luxurious amenities.
The casino has over 23,000 square meters of gaming space, 20-metre high ceilings, over 200 table games, and over 1,000 slot machines with a strong Asian and European casino game mix.
Slot machines include games such as Megabucks, which allows players to win up to $50 million. Popular games include 50 Dragons Legends, Crystal, Ju Bao Pen, and Duo Fu Duo Cai. There are also video poker machines with numerous variations.
