Macao Struggles to Maintain Prosperity Amid Casino Uncertainty
Dragon Dance Lights Up Macau Lunar New Year Celebrations Despite Economic Crisis
The streets of Macau were filled with people on the first day of Lunar New Year celebrations, after the reopening of the territory post anti-covid restrictions. However, clouds of uncertain future due to Beijing’s demands to diversify Macau’s casino-based economy loomed over the festivities.
Tourists from mainland China flocked to the gambling city, visiting the shops and historical sites, showing the welcome return of revelers to the city. But while their presence indicated hope, the reality of the situation remained gloomy. With President Xi Jinping’s anti-corruption campaign taking an awful toll on gambling and money laundering, Macao is in a tight spot.
David Green, an expert advisor to the gaming industry, said in an interview with AFP, “Macau is facing an intrinsic problem. Authorities need to show Beijing that these activities are diminishing but also act in the best interests of the city – maintaining its source of income.”
The city saw its revenue fall to its lowest levels due to the pandemic closure of businesses. While Macau depends heavily on the six casino operators for its income, local government is stepping up efforts for diversification of its economy. Under a 10 year renewal agreement, the operators must invest billions in the construction of theme parks, gastronomic restaurants, and theatres to pump new hope into the city.
The downfall of Alvin Chau, a casino mogul sentenced to 18 years in jail, exemplify Beijing’s stance on the casino industry. It was also a signal to the city that old methods of making a fortune could no longer be used.
The pandemic lockdown was ended with the reopening of borders and shops in Macau, bringing joy to locals like Mariana Soares, pharmacy owner. However, Kam Pang, owner of a dance hall, was not so fortunate, with monetary losses of $25,000.
As the city authorities take steps to restore the pre-pandemic glory, Credit Suisse analysts believe gambling revenue for general public could hit 55% of its pre-Covid levels by the end of this year, and 85% by 2024.
Residents, however, remain uncertain if Macau will ever recover its former glory – “The question is whether people will want to come back to Macao, not to gamble but to do something else” said Kam Pang.