End of an era? Macau’s government pushes to diversify economy

Jon Pill
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Posted on: August 30, 2022 3:42 pm EDT

The Macau Government has announced a major change in direction for the city. In an attempt to diversify the Special Administrative Region’s economy, the government is attempting to diversify its tourism base. This response to Macau’s current challenges, might prove to be a good opportunity for poker in the SAR.

Macau has had a rough couple of years. The SAR has an economy that is almost entirely propped up by the tourist sector. The tourist sector is, in turn, almost entirely propped up by the SAR’s casinos. And the casinos have been, until now, propped up almost entirely by visitors from the China.

In the past, about 80% of Macau’s tourists came in from the mainland. Another 10% came from nearby Hong Kong, and another 5% from Taiwan. Most of the remaining tourism came from other South East Asian nations along with a handful of American poker-nosebleeders driven overseas by black-Friday.

In 2020, mainland China announced a crackdown on the foreign exchange of the renminbi. For gamblers that meant the previously grey-market junket sector suddenly turned several shades darker. Since March 2021, the Chinese government claims to have identified 90,000 gamblers and persuaded them to stay on the mainland, where gambling is illegal.

This came to a climactic head earlier this year when Alvin Chau was arrested for overseeing SunCity’s junket operations as CEO.

This crackdown, coupled with COVID shutdowns led to the worst month on record for Macau in July of this year. Something had to give.

An international solution

Now Macau’s government has put forward a major change of direction. They are incentivising the SAR’s casinos and junket operators to look outside of greater China. The government have adjusted the tax structure, raising taxes on operators overall, but offering a five percent cut to operators who bring tourists in from overseas.

Japan and Korea are both excellent targets for this initiative. Both have with restrictive gambling laws within their nations and strong air links with Macau via the nearby hub of Hong Kong airport. Though Koreans can even be prosecuted for gambling on foreign soil.

Poker is normally less profitable than table games. But under these circumstances, it might be a handy loss leader for Macanese casinos. WPT and WSOPC branded events bring players in from all over the globe wherever they are held and could be an excellent promotional tool.

Perhaps this change is an oppurtunity to make the Vegas of the East a poker hotspot for more than just the highest rollers.

Featured image source: Flickr by Klaus Nahr, used under CC license.