Macau Told To Diversify Away From GamblingDecember 5, 2014 1:33 pm
Beijing’s ongoing crackdown on corruption, money laundering, and visa restrictions has seen the casino market shrink for six consecutive months in China’s only gambling resort of Macau, and in November revenues fell by 19.3% to $3.04 billion, its lowest total in two years.
Now Macau is facing even more challenging times ahead after Beijing has told the island resort to end its reliance on casinos, and to diversify its economy away from gambling, including offering more family oriented entertainment. The remarks were made by Basic Law Committee chairman Mr Li (photo), who was in Macau this week as part of a seminar on Macau’s Basic Law, and interestingly marked the first time a Chinese official has linked the importance of economic diversification in Macau to mainland China’s overall interests. As Mr Li explained:
“The government should not focus on economic growth and tax revenue alone when looking at Macau’s overall well-being, given the close connection between its economy, especially the gaming sector, and the mainland. It must think from the perspective of China’s economic and social stability and development.”
In 2002, Macau generated £300 million in revenues, but by 2012 that figure had sky rocketed to £28 billion, with some analysts predicting revenues to rise to £66 billion by 2020. Currently, the island’s 35 casinos provide Macau with 83.5% of its total revenues, but the gambling industry has also brought an explosion of social ills, including human trafficking, prostitution and organised crime. Furthermore, the gambling market now employs over half of Macau’s population, and has been blamed for drawing young Macanese away from pursuing careers in teaching and nursing.
Beijing is now eager to improve Macau’s image, and after the Basic Law Committee chairman’s comments this week, casino shares took another tumble with all six of the Macau’s casino operators reporting a drop in stock prices of between 2% and 6%.