This story was produced by our colleagues at the BBC.
China wants to transform Macau, known as the “Las Vegas of the East”, into a true Vegas that depends more on entertainment and tourism and less on gambling for revenue.
The former Portuguese colony returned to Chinese sovereignty 25 years ago and is still the only place in China where gambling is legal.
Inside a casino at one of Macau’s major gambling resorts, the Venetian, the gaming tables are full of customers. Many are playing baccarat, the most popular table game.
But larger crowds are gathered in the resort’s non-gaming areas, enjoying free entertainment as they watch a magician suspend an audience member in the air. One of the people in the crowd is Wendy Qiao, a tourist from mainland China who has no interest in gambling.
“There are many things here that I cannot see in Shenzhen, where I come from. I also came here to eat some Macau specialties, such as Portuguese pies, dried pork,” she said.
Qiao is the type of tourist Beijing desperately wants Macau to attract. Its casinos no longer just offer slot machines and gaming tables, and have built water parks, a virtual reality area for martial arts and a zip line. But the vast majority of the money still comes from players in mainland China.
Ben Lee is from iGamiX, a gaming consultancy based in Macau. “With the transfer, the idea was that Hong Kong would become the financial capital of this region and Macau would become the entertainment center,” he said.
“20 years later, Macau has become a gaming hub mainly for Chinese players, which I don’t think was Beijing’s intention when it allowed Macau to liberalize its gaming industry.”
Big deal for gamers
Macau’s gaming revenue was more than three times higher than Las Vegas’s before the pandemic, but iGamiX’s research shows the country makes just 5% of its non-gaming revenues – compared to Las Vegas’ 70% .
Casino operators have struggled to attract non-gambling tourists by simply opening retail stores or holding concerts, as the culture is very different.
“A typical American would go to Las Vegas, spend $200, $300 on a ticket to a show, the same amount on alcohol and maybe $20, $50 on a table and say they had a great night,” Lee said.
“The typical Asian – or more importantly, mainland Chinese – would come to Macau, spend maybe $20 on a meal and invest the remaining $480 at the table. And to them this is not entertainment, it is a commercial venture from which they hope to make a return.”
New rules, new investments
Beijing tried to free Macau from its dependence on Chinese players, who earn around 150 billion dollars. It restricts the number of visits Chinese residents can make and prohibits Macau casinos from advertising in mainland China.
Last year, new 10-year concession contracts between the Macau government and its six casino operators came into force. They require casinos to invest heavily – nearly $14 billion in total – in non-gaming events such as conventions and expos, water parks, concerts and even the revitalization of old neighborhoods.
This is good news for Honey Leung, manager of Pousada de Coloane, an elegant Portuguese-style colonial-era mansion turned beach hotel and restaurant. She wants to promote Macau’s unique cultural heritage.
“We were once colonized by Portugal, so we have Western characteristics and we also have traditional Chinese characteristics,” she said. “If we develop different aspects of Macau’s tourism, we can attract tourists with different interests, not just people who come to gamble or shop.”
Gaming industry expert Ben Lee says that to do this, the government will have to address labor shortages and transportation issues, as well as hire more English-speaking service employees.
“All of our services here, from the concierge to the room service, what do they say to you? Mandarin,” he said. “So for a typical Southeast Asian Chinese tourist from Malaysia who may not know Chinese or Mandarin or only speak the local dialect, he cannot get around.”
He said this will also mean that casinos will have to bear less profit and work harder, focusing more on non-gaming entertainment.
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