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Macau: Much More Than a Gambler's Heaven

A gambler’s heaven? Even that sounds like a bit of an understatement. But one thing this gambler’s heaven is not, it’s a gamble. You are guaranteed to have the most amazing time. Everyone is treated with kind of respect and care that only the...

Is Macau a gambler’s heaven? For how many may be tempted to instinctively answer that the small Asian island is probably the best place in the world for gambling - to simply consider it as nothing but a gambler’s heaven would be a terrible understatement.

Indeed, gambling is a fundamental part of Macau’s economy. Historically, the island got itself a name in the gambling community as - whether one likes poker, baccarat or any other kind of casino game - they have it all.

Yet, Macau is much more than that. It is an island with a great history that mixes European and Asian cultures, an important commercial port and - especially nowadays - a top tourism destination.

In this article we will briefly go over how Macau grew to a gambling kingdom, review the current situation and the most significant problems they face today.

From 16th century right to 1999, Macau has been a Portuguese colony. With a population of over 600,000 people in only 31.3 square kilometres, Macau is world’s most densely populated region.

As far as gambling goes, the industry was legalised in Macau back in 1847 - even if the first licensed brick-and-mortar casino opened its doors only in 1937.

From 1962 to 2001, a Chinese businessman named Stanley Ho (along with several businessmen in Macau and Honk Kong) controlled Macau’s gambling as a monopoly. Now the situation is very different.

Today, Macau’s massive gambling market is controlled by 6 operators – Ho’s SJM (the current market leader), and also several American brands as the MGM, Wynn, Sands, Melco Crown and Galaxy Entertainment. Together they run over 44 gambling facilities.

The expansion to the Cotai Strip

Even if Macau is already home to a significant number of casinos, many more are of casinos are yet to be built in the so-called Cotai strip, a 5.2 square kilometres of land that used to be a swamp.

Casinos expansion to Cotai started in 2006, when the Galaxy opened their first establishment there. As for today, the biggest casino available in the area is the Sands’ Venetian Macau, an big copy of the Venetian in Las Vegas. To build this luxurious and gigantic gambling complex - which was opened in 2007 - the group has invested the impressive sum of $2.4b.

At the moment, seven more casinos and resorts are under construction, and authorities believe they will become all operative by the end of 2017.

Recently, Macau’s Secretary for Economy and Finance Francis Tam Pak Yuen said that after the last of the seven casinos is built, Macau will not accept more applications for new casinos at least until 2025.

The problems of Macau

Lack of croupiers and dealers. This is one of the main problems Macau suffers for, and it is something that many believe will be a major obstacle for the development of the gambling industry in the coming years.

According to industry experts, it is estimated that by 2017 all the news casinos in the island will require more than 12,500. The local market, however, can only produce a little more than one fourth of that number.

Moreover, the employment of foreign dealers is not an viable option for the operators, as Macau has very strict immigration policies.

On the other hand, the government has issued a strict 3% cap on gaming tables growth at each casinos. They say that as long as casinos will not increase the amount of gaming tables, the market will be able to keep up with the demand.

Low salaries and few benefits. Something that has recently became a serious issue for Macau, are the strikes that casino workers have started to organise in order to get better working conditions.

During the last six months, every casino in Macau has experienced some sort of protests for better benefits and better pay.

Dealers, croupiers and other casino staff at SJM, Wynn and other casino concessionaires in Macau are demanding a 10% wage raise and better benefits.

The Future

It’s hard to say what the future holds for Macau. For years, the island has been on top of the international charts as one of the fastest growing markets in the world.

In 2006, Macau’s gambling economy overtook Las Vegas - it generates revenues that are five times bigger than the ones generated by Sin City.

The main reason for that impressive success, is that Macau gets the majority of its revenues from high roller gamblers, while Las Vegas thrives mostly on slot machines and other less profitable and remunerative games.

In recent months, however, Macau has suffered a slight drop in revenues - something that many consider could pose a serious threat to the island’s long-term plan to keep growing thanks to gambling.

Yet, as we said earlier, Macau has also managed to diversify its economy and to expand its revenue sources in order to lessen its dependency from gambling.

The tourism industry is growing, an impressive bridge between Macau and Honk Kong is supposed to be inaugurated in 2015, and there are a bunch of new development initiatives that could definitely help to make the island’s economy more solid.
In this article we will briefly go over how Macau grew to a gambling kingdom, review the current situation and the most significant problems they face today.

From 16th century to 1999 Macau was a Portuguese colony. With population exceeding 600,000 in only 31.3 square kilometres Macau is world’s most densely populated region. As far as gambling goes, it was legalized in Macau back in 1847 however only in 1937 did the first casino receive its license. From 1962 to 2001 a Chinese businessman Stanley Ho (along with several businessmen in Macau and Honk Kong) controlled Macau gambling as a monopoly. Now the situation is very different.

Macau’s massive gambling market is controlled by 6 operators – Ho’s SJM (market leader), American brands: MGM, Wynn and Sands, Melco Crown as well as Galaxy Entertainment. Together they run over 44 gambling facilities in Macau.

Expansion to Cotai

Even though by now there are plenty of casinos in Macau, a lot of casinos are yet to be built in Cotai, a 5.2 square kilometres of recently reclaimed land that previously was a swamp. Expansion started in 2006 with Galaxy opening the first casino. The biggest one is Sands’ Venetian Macau, an enlarged copy of the Sands’ Casino in Las Vegas that cost $2.4b to build and launch by 2007.

At the moment there are 7 under-construction casinos and resorts that are planned to be opened between 2015 and 2017. Recently, Macau’s Secretary for Economy and Finance Francis Tam Pak Yuen said that after the last of the seven casinos is built, Macau will not accept no more applications for new casinos at least until 2025.

The problems of Macau

Lack of croupiers and dealers

This is one of the main problems Macau sees for the casino expansion. The estimated number of the required dealers in the currently under-construction Cotai Strip casinos and resorts exceeds 12,500. However, local market can only produce a little more than a quarter of that.

Moreover, foreign dealers is not an option because of the strict Macau immigration policies.

On the other hand, the government has issued a strict 3% cap on gaming tables growth at each casinos. They say that as long as casinos will not increase the amount of gaming tables, the market will be able to keep up with the demand.

Low salaries and few benefits

Another hurting problem for Macau is worker strikes. For the last six months every casino has experienced some sort of protests for better benefits and better pay. Once, as a protest SJM dealers took a day off all at once, there were several 1000-people marches, etc.

Dealers, croupiers and other casino staff at SJM, Wynn and other Macau casino concessionaries are demanding a 10% wage raise and better benefits.

The Future

It’s hard to say what the future holds for Macau. For years they have been one of the fastest growing markets. In 2006 they have overtaken Las Vegas and by now they lead the American gambling capital 5 times! The main reason for that is that Macau gets the majority of its revenues from High Roller gamblers while Las Vegas thrives mostly on slot machines.

But in recent months they have suffered slight drop in revenues. You don’t actually expect to see Macau, such a vibrant region, in stagnation. Tourism is increasing, there is a crucial, soon-to-be opened bridge between Macau and Honk Kong With and next year there are a bunch of new casinos scheduled to open. One way or another, Macau will stay a dream destination for years to come.

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