Macau freezes casino development to check spiralling growth

Business Materials 23 April 2008 09:06 (UTC +04:00)

Macau, the Las Vegas of the East, is to freeze its gaming industry development over fears that its rapid growth is threatening the former Portuguese colony's economy. ( dpa )

Chief Executive Edmund Ho announced a series of tough measures to legislators Tuesday that included not granting new licences and freezing the number of casinos, gaming tables and slot machines.

The number of gaming concessions would be held at six, he said, and casino operators would also be barred from applying for reclaimed land to use for further development.

Ho told legislatures the action was being taken after a thorough evaluation of the industry to ensure sustainable and balanced growth of the gaming sector and Macau.

The small southern Chinese enclave, which has a population of 450,000, was handed back to China in 1999 after 449 years of Portuguese rule.

It is the only place in China where gambling is legal and draws millions of gamblers a year, mainly from China, Taiwan and Hong Kong.

Its gaming industry has boomed since 2003 when it was opened up to overseas operators, ending a 40-year monopoly by casino tycoon Stanley Ho.

It now has 4,311 gaming tables and 13,552 slot machines, compared with 424 and 814 in 2003, respectively. The number of casinos has rocketed from 11 to 29.

They include several new upmarket Las Vegas-style resorts, such as the 2.4-billion-US-dollar Venetian Macao Resort.

Gambling revenue has grown at a rate of more than 20 per cent a year, and in 2006, Macau officially became the most profitable gambling centre in the world, generating 7 billion US dollars in gambling revenue, around 1 billion US dollars more than the famous Vegas Strip.

However, the boom has had its social costs as Macau's infrastructure struggles to cope with the 200,000 people a day crossing the land border with China and school leavers shunning college to snap up easy jobs in casinos.

Francis Tam, Macau's economy and finance secretary said the fast casino growth had strained Macau's land and labour resources and led to unfavourable social repercussions.

There are currently six casino-operating concessions and subconcessions in Macau. These include Stanley Ho's STDM, Wynn Resorts, Las Vegas Sands and Galaxy Entertainment Group, a partnership between MGM Mirage and Stanley Ho's daughter Pansy.