Macau moves away from gambling as VIP players target gaming destinations beyond Beijing’s scrutiny
City is still the top choice for those seeking to have a flutter, but the high-stakes gamblers remain fearful of getting caught up in the mainland government’s anti-graft crackdown and are trying their hand elsewhere
In its boom years, Macau was a gambling hub on steroids, regularly raking in as much as seven times more in annual gaming revenue than Las Vegas. It seemed like the safest bet in the industry for investors looking to pour money into new casinos, with a winning streak that appeared unstoppable.
But then, in late 2012, Beijing implemented its antigraft crackdown, a war on corruption that blew a huge hole in the world’s biggest gambling hub. Suddenly, all that glittered about Macau was not so golden. The so-called “big-whale” gamblers, who didn’t think twice about dropping HK$1 million on a single bet and brought in close to two-thirds of Macau's gaming revenues, stopped coming to avoid the gaze of Beijing. Similarly, the organisers of junkets – on commission from the casinos to bring in the high-rollers, lend them money and settle their debts – started shutting up shop. The VIP market took a huge hit from which, to this day, it has yet to recover.
While these developments have been bad news for Macau, which has seen a two year month-on-month decline in gaming revenues, other gambling destinations nearby have been working to turn Macau’s loss of the lucrative VIP market to their gain. Suddenly, it is no longer just Macau that is spoken of when referring to Asia’s gambling industry.
“There is no doubt that play has migrated to jurisdictions which are outside Macau. Principal beneficiaries have been Cambodia, the Philippines and Australia,” says David Green, gaming regulation expert and founder of Newpage Consulting. “People haven’t stopped gambling; they have re-directed their play away from the direct gaze of the PRC.”
Indeed, other Asian gaming centres are starting to show growth. In the second half of 2014, Cambodia’s VIP gambling revenue grew 32 per cent, while the Philippines, where Manila’s City of Dreams complex opened its doors, saw a 92 per cent jump during the same period.
