Why Asian Gaming Hub Macao Is Getting Tougher on its Big Casinos

February 21, 2022 Macau Crime & Legal Industry Updates

For many serious patrons of casinos, Chinese-ruled Macao has been the mecca of gaming, with high-end shopping and even higher-stakes tables. One of the world’s biggest gambling centers before the COVID-19 closures, Macao is now experiencing tougher scrutiny on its casino scene as part of what analysts describe as an effort to control crime and capital outflows that rippled into the mainland China economy.

A draft gaming bill now pending in the Macao Legislative Assembly would stop casino operators from issuing junket licenses, which are for larger organized tours, and from sharing revenue with any gambler-to-casino intermediaries. It would limit the number of newly licensed casinos to six, with terms of 10 years, half the current time, while specifying maximum numbers of gaming tables and gaming machines.

Efforts to redo gaming in the former Portuguese colony that has long thrived on casino income fall in line with Chinese President Xi Jinping’s ideals for a less corrupt, more controlled China, some analysts believe.

Mainland Chinese tourists, the top source of casino revenue, had taken so much cash to the offshore territory by 2013 that China began tightening rules to curb money laundering. The Chinese Communist Party increasingly resented outflows of mainland Chinese money into Macao bank accounts and has tried for years to slow that process, said Dexter Roberts, U.S.-based author of The Myth of Chinese Capitalism.

“I think that in many ways, in the eyes of Xi Jinping, Macao is ugly and objectionable,” Roberts said. “I think he would sort of plug his nose and put up with it, knowing that the last thing they want to do is destroy the economy of Macao, but I think that Xi Jinping actually has an attitude where he looks down on excessive wealth (and) looks down on vice to a degree.”

Controlled return of tourism

The COVID-19 pandemic has sealed Macao’s borders, even to nearby Hong Kong, since early 2020, handing casinos a “devastating shock,” said Rajiv Biswas, Asia-Pacific chief economist with IHS Markit in Singapore.

Mainland Chinese tourists began coming back in August 2020 as COVID-19 was brought under control, a tourism office spokesperson said. They’re allowed to visit today in limited numbers.

“With the COVID-19 pandemic situation relatively stable in Macao and mainland China, tourism flows have started to resume between the two places in a phased manner since mid-August 2020, placing the city’s tourism on track for a gradual recovery,” the spokesperson said.