The Monte Carlo of the Orient

18 May 2017

Macau, or officially the Macao Special Administrative Region of the People’s Republic of China is a tiny, 30.5 km2 former Portuguese territory, located about 64km west of Hong Kong, across the Pearl River Delta. It’s often known as the ‘Monte Carlo of the Orient’ due to its dependency on casinos and gambling. In fact, around 50% of Macau’s government income comes from gambling taxes alone. Currently there are no fewer than 33 casinos operating in Macau – impressive for an area the size of an average British town (it’s rather crowded too, with a population of over 650,000)!

The largest casino in Macau is The Venetian Macao, a luxury hotel and casino resort, owned by the Las Vegas Sands company, boasting 39 stories and a floor space of 980,000 m2 – making it the seventh largest building (by floor space), and absolute biggest casino in the world! The Venetian-themed resort itself has a cool 3,000 suites, a huge 110,000 m2 of convention space, 150,000 m2 of shops and retail, and 51,000 m2 of casino floor. What’s all that casino space used for? Well, try 3,400 slot machines and 800 gaming tables! Oh, and then there’s also a 15,000-seat area for sporting and entertainment events!

Macau is the only part of China where casinos as legal, so how did it all start? Way back in 1557, the Portuguese started to build a small settlement, mainly consisting of warehouse to dry goods that had been drenched during the long oceanic voyages. They paid a rent of 18.9 kilograms of silver to the Chinese for the territory – something that continued as late as 1863. In the late 1840’s the Portuguese population of Macau had grown to the point where they were able to secure a degree of self-administration – though ultimate power remained with the Chinese authorities. But, following the First Opium War, in 1887 the Chinese handed over sovereignty of Macau to the Portuguese government.

Shipping and opium was all very well and good, but the fledgling Portuguese authorities in Macau realized they needed to raise some serious cash, if they were going to turn the tiny scrap of land into a realistic long-term success. It didn’t take them long to figure they could make money from gambling so, around 1850, the authorities created a licensing system for the local Chinese gambling dens (fantan houses). With over two hundred fantans swelling the tax man’s coffers, they knew they were onto a good thing! In in 1937 another casino monopoly concession was awarded to the Tai Heng Company, but it wasn’t until 1962, when a monopoly on gaming was acquired by the Sociedade de Turismo e Diversões de Macau – a syndicate formed by Hong Kong and Macau business interests – that things started really moving!

Introducing western-style games for the first time (previously gambling in Macau had focused on traditional Chinese games), and investing in the transport infrastructure between Macau and Hong Kong, the STDM managed to lure millions of gamblers across the water from British Hong Kong annually. Hong Kong was returned to the People’s Republic of China in 1997, and Macau followed in 1999 – causing many people to doubt the future of the casino and gambling industries in the area. They needn’t have worried though. Communist the PRC may be on paper, but they couldn’t resist the incredible revenues generated by the operations in Macau, and made no changes!

In 2002 Macau ended the system of regulated gambling monopolies, and started granting concessions to several operators, including Sociedade de Jogos de Macau, Wynn Resorts, Las Vegas Sands, Galaxy Entertainment Group, MGM Mirage – Pansy Ho Chiu-king, and Melco – PBL. Today Macau is home to some of the world’s most impressive casino resorts, and gambling is the bedrock of the region – not bad considering it started as a cluster of warehouses in which Portuguese traders dried their soggy imports!

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