Mainland's gaming potential huge say researchers

Tuesday 14th of July 2015

Singapore opens first casino on auspicious start of Chinese New Year

Two Macau academics have concluded through their research that opening up China’s gambling industry could see huge revenues for the country given Macau’s limited ability to absorb the amount the Chinese gamble.

Macau Polytechnic Institute professor Li Sheng and Institute for Tourism Studies assistant professor Weibing Zhao say the Chinese gamble around CNY1 trillion per year ($161 billion), with Macau absorbing around one fifth of that value in 2011, when gaming revenue amounted to MOP268 billion. Last year, gaming revenues totalled around MOP352 billion, still a fraction of what Chinese gamblers spent.

“Although Macau is the only Chinese territory where gambling is legal, its gaming capacity cannot entirely solve the underutilisation issue of Mainland China”, the pair write in the article titled ‘Strategic Destination Management in the Face of Foreign Competition: the Case of Macau SAR’.

The authors say that foreign casinos are targeting the Chinese, meaning vast sums of money are leaving the mainland.

“If the Chinese government does not take any action, the capital-exodus problem driven by overseas gambling will become a real threat to national welfare”, they added.

“The mushrooming of casinos in the Asia Pacific region, particularly near the Chinese border, is making the situation increasingly worse. Many destination nations, though permitting gaming, restrict or prohibit their citizens from entering casinos, showing an overt intention to earn money from foreigners”.

The authors also propose that the mainland focuses on mass market players so as to not compete with Macau for VIPs.