Macau, China, the Las Vegas of the Far East, is looking at a very uncertain future. Fernando Chui took over the office of Macau Chief Executive today. And his orders from China are to rein in growth spurts and to come up with other ways to maintain economic expansion other than casino gambling. This comes on the heels of efforts by the Chinese government to rein in the economic boom brought about in the gambling arena.
Macau’s economic growth saw double digit growth for years following the opening of its gambling market. The arrival of Las Vegas casinos in Macau to compete with the Stanley Ho empire, sparked an economic boom. Then the government of China, worried that such growth would spark social disorder and upheaval, started to limit visas of mainland Chinese citizens wanting to travel to Macau, China’s only legal gambling district.
After a recent easing of restrictions by China, the economy started to grow again, leading the U.S. casinos to hold or plan to hold IPOs on the Hong Kong exchange to raise money to continue their development and expansion. Now with Fernando Chui taking office, the industry is waiting and watching to see what policies will be instituted toward the gambling venues.
According to recent statistics, gambling was responsible for three fourths of Macau government revenue. Gaming income for the month of October set an all time record of $1.59 billion. But the Chinese government wants to bring in more foreign money while at the same time, limiting the gambling from the mainland. Such measure have produced proposals included limiting the number of gaming tables in Macau and raising the legal age to gamble from 18 to 21.
While China is trying to limit growth in Macau’s gambling sphere, new competition for that very customer base is opening up in Asia, as evidenced by the opening of the Las Vegas Sands project in Singapore early in 2010.
Fernando Chui will hopefully realize that the gamblers, and their money, are going to go where they can play the easiest and with the least restrictions.