Great Bets

Helping You Find Your Next Bet

China Continues Casino Crackdown in Macau with Ten-Year Licence Limits

Macau Casino InteriorOne of the most popular casino hubs on the planet has been dealt a further blow after the Chinese government confirmed it’s plan to tighten the screw of legislation once again.

New and existing operators in Macau will now only be able to apply for a licence lasting ten years, which is a timeframe slashed in half since the last time authorities issued their concessions.

Government ministers revealed back in September that they were looking at new ways to regulate gaming in the region, leaving the six operators that are approved in Macau wondering what might be around the corner.

The Macau Executive Council, who oversee the running of the region’s casino floors, have reiterated their demand that gaming does not undermine the ‘national security’ of China, with accusations of money laundering and trafficking at the heart of their concerns. A series of arrests for ‘illegal gambling’ back in November saw shares in MGM China, Wynn Macau and Sands China plummet by an eye-watering 10%, shaving around £12 billion off their combined value.

The Council has already increased their number of casino inspectors from 192 to 495, and a clampdown on VIP ‘junkets’, illegal lending and cash bonuses has already begun.

The new rules will see the number of operators allowed to run casinos in Macau still capped at six, although their licence extensions – which are up for renewal in June 2022 –will now be limited to a decade if approved, rather than the 20-year span they could previously apply for.

The authorities are also planning to increase the amount of equity that local businesses and investors can own in a casino from 10% to 15% – ensuring that the Chinese government would enjoy a boost in tax revenue.

Counting the Cost

Chinese Flag with Downward Red Arrow

The pandemic has been particularly hard on Macau, with international travel largely off the agenda.

This is a region that, once upon a time, raked in more in gambling revenue in a single week than Las Vegas did in a whole month, but the past couple of years have seen profits tumble amid the virus and regulatory crackdowns.

Initially a monopoly run by a local businessman, Stanley Ho, Macau exploded into life and authorities were forced to crack down on an industry rife with gang warfare as various Triad factions tried to gain control of the tables.

The Chinese government broke up the fun and games by allowing another five overseas casino operators to apply for a licence in 2002. The likes of MGM, Wynn and Las Vegas Sands – who developed the Venetian Macao, which was the largest casino in the world at the time – all jumping at the chance.

Macau’s casino district grew to become a £26 billion industry annually, accounting for 80% of the region’s revenue and employing more than 80,000 people.

But with the traffic of visitors from the Chinese mainland drying up, and more robust legislative powers being introduced, profits plunged and takings in 2020 totalled ‘just’ £5.5 billion.

That figure recovered to £8 billion in 2021, but operators are still counting the cost of the area’s dramatic downturn.