Macau Is Seeking to Draw In Foreign Tourists Due to Economic Slowdown in China
Macau has often been compared to Las Vegas due to its variety of lavish casinos. Macau has also become a favorite vacation spot for tourists and gambling enthusiasts. The region was previously controlled by the Portuguese and surpassed Las Vegas years ago as the casino capital of the world. Back in 2010, Macau’s gambling revenue receipts were higher than the revenue in the whole state of Nevada. In addition to having some of the most beautiful casinos in the world, Macau is also known for its extravagant architecture.
The story of Macau’s impressive development indicates the rise of China and the success that often comes from globalization. One of the reasons globalization has been so lucrative is because of foreign casino companies that have set up shop in Macau. The success of Macau also speaks to the rise of China, since the region has provided the type of prosperity that has made it possible for Macau’s citizens to travel and gamble more.
Casino operations account for a significant amount of tax revenue for Macau’s government. In 2010, casino activity was 40% of all tax revenue collected. A decade later, government income from taxes accrued from casino gambling accounted for 81% of all collected tax revenue. This huge change comes as the result of a choice to open up the gambling industry and invite firms from other countries to vie for casino licensing.
Until 2001, there was only one company that was authorized to operate casinos in Macau. For 40 years, the industry was dominated by a company called Sociedade de Turismo e Diversões de Maca, SA (STDM). From 2002 on, licenses for casinos were granted to a number of foreign multinational companies and joint ventures. These included firms from Hong Kong, Australia and the US. A number of companies that had made a name for themselves in Las Vegas, including Galaxy, Wynn Resorts, MGM and Las Vegas Sands, are now in Macau as well.
Huge investments were put into new casino resorts that included fancy shopping malls and lavish hotels. Macau is small – it was only 11.6 square kilometers in 1912 –so land proclamation projects were needed to host the growing gambling industry. By 2010, Macau had grown to be 29.7 square kilometers. This includes 6 square kilometers of new land that connects the tiny islands of Coloane and Taipa. These small regions are host to many of the large casino complexes in Macau.
New casinos provided a number of jobs for those living in Macau. However, the economic impact was even greater because of the number of tourists that were visiting the area. Significant tax revenue was generated as well. After ten years of constant growth in the gambling industry due to the opening of new casino facilities, tax revenue from casinos reached an all-time high in 2014. The numbers went down again after Xi Jinping, the president of China, implemented an anti-corruption campaign that affected the entire country.
VIP Gambling In Macau
The Beijing government has viewed the VIP gambling rooms in Macau as a massive leakage of capital from the Chinese economy. A large portion of the money that VIPs are using to gamble was viewed as proceeds from bribery and corruption in mainland China.
In 2014, tax revenue from gambling provided 84 percent of the total revenue in Macau. Three years later, the revenue declined to 79 percent. However, these percentages don’t indicate the decline for funds that are available to the Chinese government. Government-available funds went from $20.1 billion in 2014 to $15.7 billion in 2017. This is largely because several wealthy individuals in China avoided the casinos in Macau to dodge scrutiny during Xi’s crackdown on corruption.
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An energy industry consultant who spends a lot of time on North Sea oil rigs and conducting studies in and around the Arctic Circle. Sean started playing online casino games to compensate for long periods of boredom. In no time he turned from casual player to fan to fanatic and has since made it his mission to study the online casino universe from the players perspective. As a regular participant and contributor to Top Casino Picks, Sean sits in the Top Casino Picks advisory board and oversees our review team.
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