China and Macau have an interesting relationship. Technically, China has control over much of Macau, as it’s one of its territories. Despite that, Macau has implemented laws that are completely different from what you might find in mainland China. This week, the Chinese government has called for new regulations in Macau over its gambling industry.
It comes at an interesting time. Macau has been struggling to generate revenue in recent months. There is worry that the decrease in tourism here could have some major effects on the city, and even mainland China.
Let’s take a look at why Macau is struggling, and the reasons why China is calling for some new regulations.
Times have been tough in Macau. The largest amount of tourists in this country come from China. As China’s economy slows, more people in the country are choosing to hold onto their money and avoid gambling. As a result, the revenue in Macau is falling faster than it has in years.
The Chinese New Year last month helped to bring in some more money to Macau, yet it’s once again fallen towards the end of February. There are more reasons for the lack of revenue than just a struggling Chinese economy, too.
Macau is implementing a smoking ban throughout all casinos. China has one of the highest smoking rates in the world and some of the top Chinese VIP’s are choosing to gamble elsewhere due to this ban.
The Junket business in Macau is struggling as well. We recently covered the news that more junkets in Macau are choosing to take their business overseas. Many countries in Asia are choosing to embrace their casino industry. Cambodia and the Philippines are profiting massively.
Officials in the Chinese government are now giving opinion over the matter. They want to see officials in the territory implement some new regulations and begin offering more non-gambling activities.
Fu Ziying, director of the Liaison Office of the Central People’s Government in the Macau Special Administrative Region, confirmed that China wants to see change. He agrees that Macau needs to take some additional steps to protect its economy.
He wants to see Macau rely less on tourism from mainland China. The questions of how Macau achieves this is up for debate.
“There’s not much room for us – a place of only 30 square kilometre sand 600,000 people – to transition into something else,” Fu said. “How to achieve a transition [of the economy] and make it more diversified? I think the only and important way is to actively integrate into the national development plan.”
Details of the new regulations in Macau that China is calling for are unclear. Based on reports, it looks like the government here want Macau to better prepare for periods of revenue decreases.
Macau is already working to diversify its tourism options. Officials here recognize that a lack of tourism options outside of gambling is hurting the economy. They are now beginning to add more non-gambling options throughout the city.
This seems to be paying off. A census study from January claimed that out of 7.53 return visitors to Macau, 69.2% returned because of the good food and study. Adding concert venues and shopping centers will help to bring in millions of additional revenue every month.
There is no timetable set for new regulations in Macau to be implemented on the gambling industry. Officials here are looking to add measures to attract more VIP gamblers. Even if Chinese VIP’s are holding onto their money, there is still a huge market for big gamblers in other parts of the world.
Most analysts predict Macau will begin experiencing revenue increases again soon. This territory remains the gambling hub of the world, and millions of tourists are still flocking here every single year.
What do you think Macau needs to do to boost their revenue? Will non-gambling options here help the economy? Let us know what you think in the comment section below!
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