China Mulls Extending Gambling to Hainan

China is currently exploring the possibility of legalizing gambling in Hainan, the country’s southernmost province consisting of a number of tropical islands with sandy beaches, sunny weather, and an already well-developed tourist industry.
The development is seen as part of a wider move to increase tourism in the country, which stood at 31 million visitors in 2016, as well as placing it in a better position to compete with other gambling destinations spread out across the East, including the Philipines, Vietnam, Australia, and Japan when it eventually opens its integrated casino resorts in time for the 2020 Tokyo Olympics.
At present, China bans all gambling activities apart from those offered in Macau, but apparently Chinese President Xi Jinping has already indicated that he was open to allowing a range of gambling activities to be permitted in Hainan. In fact, a draft proposal is currently being worked out and amongst the potential gambling activities being considered is a lottery, internet gambling, sports betting, and brick-and-mortar casinos later on down the line.
News of the development has created a buzz of excitement in Hainan, especially as it has ben suffering financial difficulties following troubles experienced by its biggest conglomerate HNA and its flagship Hainan Airlines Holding Co. The opposite reaction can be said of Macau located just 474 km away, though, which has reacted with indignation at the news. As Sam Chi Yung, a Hong Kong analyst with South China Financial Holdings Ltd, explains:
“I think investors were shocked — I’m a bit surprised. It’s difficult to say what the impact will be on their profits as it all depends on China’s policy and how they arrange the license. But what’s sure is that people going to Macau to gamble will drop.”
At the head of Macau’s list of concerns is that a regulated gambling market in Hainan would attract the same type of mass market tourists and gamblers as it is currently targeting. While firms such as Morgan Stanley and Sanford C. Bernstein & Co have thus far tried to play down such worries, major casino companies such as Las Vegas Sands and MGM will obviously be wary of such a development, especially considering the amount of money that they have invested and continue to spend in Macau.