How Macau became bigger Than Vegas

Casino-style gambling is a popular entertainment-based activity in all corners of the globe.

In the mid-20th century, the small Nevada town of Las Vegas attained the reputation of the world’s gambling mecca, a title it held for close to six decades. It rose to such prominence thanks to this state legalizing this pastime in 1931 and the systematic casino/hotel expansion that began to unfold in Clark county following World War II. By 1954, Las Vegas notched a figure of over 8 million annual visitors, who pumped more than $200 million into its gaming establishments. At this time, performers such as Liberace, Dean Martin, and Bing Crosby also found a home in Vegas, as the city’s entertainment scene blossomed.

As Vegas was amidst the inception of its meteoric rise, on the other side of the planet, a Chinese administrative region located in the western Pearl River Delta by the South China Sea was also making some massive gaming moves. In 1962, the Macau government granted a syndicate named Sociedade de Turismo e Diversões de Macau (STDM) monopoly rights to all forms of gambling in the region. STDM, led by Macau and Hong Kong business people, instantly began to modernize marine transport and introduced western casino games in Macau, many of which can be found at American online casinos. Those two actions caused millions of Hong Kong gamblers to flock to this administrative region each year. Thus, its gambling industry slowly expanded for decades, until in 2007, it overtook the Las Vegas Strip in terms of gambling revenues.

The history of Macau

In 1557, China decided to lease the territory of current-day Macau to Portugal. It became the first European colony in East Asia, attaining its name from the Chinese patron goddess of sailors A-Ma, with the Portuguese adapting this name to Macau.

In the coming centuries, Macau’s ports thrived as they became the chief intermediary in the trade between the rest of the world and Asia. It also became an outpost for western religions, as St. Francis Xavier used it as its base of operations to convert many Chinese and Japanese to Christianity.

By the 1800s, the British and Dutch managed to gain a foothold in East Asia, controlling many of its trading routes. Once that happened, Macau’s age of prosperity came to an end. It remained under Portuguese rule until 1999, when it got transferred back to China. From that point on, it has acted as its administrative region, one with a separate economic and governing system.

The rise of gambling in Macau

Gambling became legalized in Macau in 1849 when the Portuguese government attempted to create a new source of tax revenue. It introduced a licensing system, where the government would collect rent from pre-approved gambling houses. During the 19th century, the region had an estimated 200 such establishments, gaining a reputation as East China’s betting hub.

As mentioned above, in 1962, STDM managed to get a government-sanctioned monopoly over all forms of gambling in Macau, something that lasted until 2001. Once this region got transferred back to the People’s Republic of China in 1999, the Macau government immediately began discussions to end the monopoly system. It did so in 2001, and a year later, awarded three casino operators concessions, a number which later got expanded to six. The business entities that entered this market were Wynn Resorts, the Las Vegas Sands, Pansy Ho Chiu-king and MGM, the team of PBL and Melco, Galaxy Entertainment, and SJM Holdings.

The state of Macau’s gambling industry

Following the entry of foreign casino brands, the Macau market began to blow up. In 2007, poker got introduced in its casinos, and it overtook Vegas in terms of overall gaming revenues. Today, wagering on games of chance and sports is the most crucial economic sector in Macau. It generates close to 58,000 jobs and is responsible for about 80% of the region’s total tax revenues.

There are 41 casinos in Macau, of which SJM Holdings owns and operates 22. In 2019, these 41 venues managed to generate over $36 billion in gambling revenues. For comparison-sake, according to the Nevada Gaming Control Board, Vegas casinos raked in $6.5 billion in 2019.

The difference between these two premier gambling hot spots is that 74% of Macau tourists choose to gamble, while in Vegas, this percentage is slightly lower at 69%. Also, Macau is a destination favored by baccarat and poker high-rollers, which accounts for this region’s massive revenue lead.

To wrap up

Gambling has been a viable business sphere in Macau for a century and a half. However, it exploded once this territory returned to China, and it decided to end STDM’s monopoly in this sector in 2001. Once off-shore brands attained permission to enter this market, things have never been the same again, and there is now a substantial revenue gulf between Macau and Sin City. Thus, it is unlikely that the latter will regain its title as the world’s premier gambling destination any time soon.

About the author

Shelly Schiff has been working in the gambling industry since 2009, mainly on the digital side of things, employed by OnlineUnitedStatesCasinos.com. However, over her eleven-year career, Shelly has provided content for many other top interactive gaming websites. She knows all there is to know about slots and has in-depth knowledge of the most popular table games. Her golden retriever Garry occupies most of her leisure time. Though, when she can, she loves reading Jim Thompson-like crime novels.

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