brothels. In 1847 games of chance were legalised and the sector was dominated by games such as Fantan and PaiGow and by the end of that century gambling made up almost 50 per cent of the government’s revenues.
Even when Macau came under Chinese rule in 1999 this continued, and it is the only place on Chinese soil where casinos are legal.
Macau operates under the same political model as Hong Kong - ‘one country, two systems’ rule, which gives the region a high degree of autonomy enabling Macau to have its own government, legal and financial affairs, and its own currency.
Tourism was pushed to work hand in hand with the industry to bring players in and the breakthrough began in 1962 when the late Stanley Ho, gained the monopoly rights to run casinos through a concession granted to his company Sociedade de Turismo e Diversoes de Macao (STDM).
Western-style games arrived and glittering modern casinos opened and this monopoly continued for 40 years. China’s economy grew and the wealth of Macau increased.
After 1999 when control of Macau reverted to mainland China and the monopoly was due to expire in 2001 the government invited new
bidders to enter the casino market. Tree new concessions were awarded to SJM (a subsidiary of STDM), Wynn Resorts and Galaxy followed by three more sub-concessions granted to Melco, Sands China and MGM.
Te Gaming Inspection and Coordination Bureau (DICJ) collaborates with the government in terms of gaming policies and operations of casinos and pari-mutuel betting. Te government taxes casinos with a direct special gaming tax of 35 per cent on GGR plus an additional five per cent which goes towards social, tourism and welfare purposes.
In May 2004 Sands China opened its first casino. Te Venetian was the first ever gaming investment projected by an American company in Asia and cost US$240m. Galaxy followed with Casino Waldo.
And then the market exploded. From 11 casinos in 2002 casinos there were 41 in 2019. Currently, there are 30 casinos.
Casino revenues also boomed from just over US$2.7bn in 2002 to a peak of US$45bn (MOP361.8bn) in 2013. Tese declined over the following years due to China’s restrictions on residents accessing funds for gambling. But by 2019 Macau was welcoming two million visitors a month on average and gaming revenues were around US$37bn. Ten Coronavirus arrived and
this took a huge toll causing revenues to plummet by around 80 per cent (US$7.48bn in 2020, $10.7bn in 2021 and $5.22bn in 2022).
Prior to the pandemic Macau’s casino market was said to be six times the size of Las Vegas in terms of gambling revenue. Tis year the sector has slowly been embarking on a recovery journey after the three-year-long meltdown.
Te first half of FY2023 is already at US$10bn in gaming revenues – an increase of more than 200 per cent compared to the first half of FY2022. Analysts have predicted casino revenue could reach MOP181.5bn (US$22.6bn) this year – 62 per cent of the 2019 levels.
Te Sands China annual report says: “Macau is the largest gaming market in the world and the only location in China offering legalised casino gaming. We believe visitation will return to pre- pandemic levels and will continue to experience meaningful long-term growth. We believe this growth will be driven by a variety of factors, including the movement of Chinese citizens to urban centres in China, the continued growth of the Chinese outbound tourism market, the increased utilisation of existing transportation infrastructure, the introduction of new transportation infrastructure and the continued increase in hotel room inventory in Macau and neighbouring Hengqin Island.
WIRE / PULSE / INSIGHT / REPORTS P53
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