Monday, October 6, 2008

Turning Off the Tap

In the last few years Macau has emerged as the Las Vegas of the East.

Last year hotels like The Venetian opened, along with Wynn and many others from the United States.

Even Canadian company Cirque du Soleil has set up shop in the Venetian with its show, Zaia.

Since the number of hotels and casinos has significantly increased in the former Portuguese colony, its profit takings from gambling has been higher than all of Las Vegas combined.

And that may be one of the reasons why the Chinese government has come up with its latest measures to restrict the number of visits mainlanders can make to the former sleepy town an hour's fast ferry ride from Hong Kong.

For the first time in nearly three years, Macau's monthly revenue fell to 6.9 billion patacas ($86 million), down 3.4 percent from a year ago, and 28 percent from the previous month, according to Portuguese news agency Lusa.

Casino revenue makes up 60 percent of Macau's gross domestic product in the first half of this year, and the secretary for the economy and finance Francis Tam Pak-yuen estimates a 36 percent decline in gaming revenue from September to December, compared to the same period last year.

Recently, the central government has been trying to reduce the ease and frequency mainland passport holders, including non-permanent Hong Kong residents, can travel to Macau.

Starting on June 1, it was reduced to once a month from once a fortnight, and then a month later it was once every two months. Starting on September 1, mainlanders traveling or working in Hong Kong have to apply for a separate permit to visit Macau, when previously they could visit on their Hong Kong permit.

And now from this month, Guangdong residents can only visit Macau once every three months.

This effect will reverberate through Macau like a deep freeze. Even before the post-handover casino boom, the city depended on the gambling industry to keep the economy alive. This latest measure will definitely halt or significantly slow down Macau's economy, something it doesn't need right now.

It feels like an ominous sign someone up there is displeased with how mainlanders are only too eager to gamble, as these punters don't seem to mind they are losing so much...

1 comment:

ks said...

it is no just gambling, it is money laundering that worries the central government. this is one of the devices to root out corruption. a good move indeed.