Why Is Macao Getting Slashed in the Gambling Industry?

The recent economic downturn in China has prompted a large number of Chinese to rush to acquire more casino experience and expertise. It is evident that the Chinese government has approved a large-scale plan to build hundreds of new casinos throughout China. While many of these plans are still in the planning stages, it is clear that China is feverishly working towards improving its national image, as well as making its citizens financially secure. If the Chinese government has its way however, this massive expansion of gambling will only spur even more rapid social chaos in China.

The recent blacklist, launched in August, aims to halt Chinese nationals from travelling to overseas casino destinations, which they are allegedly endangering the private and public safety of Chinese citizens. The blacklist was reportedly introduced as a measure in response to the increasing number of cases of mafia-related sexual assaults and theft committed by Chinese gamblers in casinos in Las Vegas, in addition to the rise in gambling related crimes committed by Chinese citizens abroad. However, many experts have suggested that the recent move to ban Chinese gambling is being done simply in order to distract the public from the numerous negative issues on the Chinese government’s growing illegal gambling industry. Recently, there have been reports of extremely high-quality gambling equipment being stolen in China, including hi-tech digital devices that are essential for random number generation (RNG). There have also been multiple reports of gambling debts running up to several billion dollars, with no end in sight.

The reasons given by the Chinese government for introducing the latest policy against foreign gambling include increasing unemployment rates, the risk of financial collapse, the spread of infectious diseases, and even the possibility of terrorist activities carried out through gambling. In addition to all these reasons, the Chinese government claims that the ban on gambling is necessary because gambling is a symbol of Western decadence and weakness and is considered a stepping stone to material wealth. On its own, China does not have a significant amount of money to invest in international gambling facilities and is limited in its ability to impact negatively on China’s tourism industry, one of the country’s most important sources of income. Nevertheless, the current situation, and the potential problems ahead, have forced the Chinese government to take action.

Since most of the world’s major casino developers are based in Atlantic City, where the majority of their profits are generated, the ban will effectively shut down any potential casino activity in China. Additionally, as the largest consumer of casino products in the world, China will suffer a severe hit in tourism and foreign investment once the country’s most popular gambling cities, Macao and Shanghai, become inaccessible. The economic impact to China could be worse than the worldwide recession. These are some of the worst consequences of such a move, which is also the most damaging to American interests.

While the Chinese government may not have chosen to close down the largest and most profitable international casinos, they certainly have the power and will to do so if they feel they are losing too much money. Furthermore, the Chinese realize that the US is not protecting them from direct competition, so closing the two richest gambling cities in the world would leave China with no other choice but to seek US assistance in preserving its status as a global powerhouse. China is seeking billions of dollars in American aid to offset the lost tourism and gaming revenue caused by the closure of Macao and Shanghai. That request is unlikely to go over well in the US Congress, where members are overwhelmingly opposed to giving China such large sums of money, given the fact that both of these gambling cities are US citizens. Even if Congress were to give the Chinese government its wish, the Chinese government would simply use the US stimulus money to build up its own gambling establishments, leaving America with a bunch of polluted river rocks and a hurting economy.

At the same time, China’s neighbors in the South and the East are not happy at the loss of their largest gambling mecca. In the past, China enjoyed a very favorable relationship with the several countries surrounding it in the region, but recently there have been serious strains. There are now serious discussions about the viability of the nations bordering China in the future, given that Macao and the neighboring Indian Ocean regions have lost significant chunks of their gambling business to Macao and neighboring India. For now, China is content to wait and see how the situation plays out, but what does this mean for the world’s gambling business? Will Chinese officials eventually push for full regulation of their own industry?