INTERNATIONAL POLICY DIGEST

Macao has become a gambling destination.

What place do you think of when someone says “the world’s casino capital”? Do you think of Las Vegas, or maybe Monte Carlo? Many people would say that it is a notorious city in Nevada, but Macao is the actual gambling capital of the world. With 41 casinos and gambling houses, the city-state generated $7.61 billion from its gambling industry in 2020.

However, even for many seasonal gamblers, Macao remains a mystery. To find out more about its history and how it became the number one gambling spot on the planet, read on!

Macao was a Portuguese colony when the first gambling venues started arising in this city. Of course, they were nothing like today’s luxurious and shiny casinos; instead, these houses were hidden, seedy spots with even seedier hosts. Let’s see how everything started.

Macao was a Portuguese colony for over four centuries since the Portuguese conquistadors raised their flag over Macao in 1557. At the time, the city was an undeveloped port, given over to the Portuguese by the Chinese as compensation for helping them reduce the pirate threat in the region. The Portuguese used the port for trading, which helped them establish the trade route between the Mediterranean and the Far East.

During the Portuguese rule over Macao, the first casinos were established to produce additional income for the Portuguese royal family. Nonetheless, the Macao casinos of today have little to no connection with Macao from the past. Back then, it was a dangerous place controlled by local gangs and criminals, with casinos that were nothing like modern gambling rooms. Camilo Pessanha – a Portuguese poet who lived in Macao at the beginning of the 20th century – described the city as a “material and moral rubbish heap.”

Macao was in the hands of the Portuguese until the end of the millennium. In 1999, the province was returned to the People’s Republic of China after 442 years.

When discussing modern Macao, it’s impossible not to mention the father of all modern Macao gambling: Stanley Ho.

Macao took its first steps towards becoming the world’s casino capital in the nineteen-twenties. Still, the true beginning of this era didn’t come until Stanely Ho appeared in the 1960s and monopolized gambling in the city. Ho’s main contribution to elevating the Macao gambling scene was establishing the Sociedade de Turismo e Diversões de Macao (STDM), Macao’s gambling conglomerate.

It wasn’t an easy thing to do. At the dawn of Ho’s era, Macao’s casinos were still owned by so-called casino barons. The city already had a few modern-day casinos, but they were controlled by shady organizations. With his syndicate, Ho wrestled the power from the overtly criminal groups and took over a third of the ownership of all casinos in the city, including those owned by Lisboa.

Although Stanely Ho set the scene for the modern gambling industry in Macao, none of it would have been possible without the Chinese authorities. China had a crucial role in suppressing the local gangs, which grew unchecked during Portugal’s rule and regulating Macao’s gambling scene.

On the same day Portugal finally relinquished its hold on Macao in 1999, the Chinese army marched through the city center, sending a clear message that there would be no mercy for gangs and black market gambling.

It was China that transformed Macao from an unregulated, morally bankrupt gang town to the most desirable destination for high-rollers and VIP gambling guests. China imposed the same political model as it did after the British left Hong Kong: “One country, two systems.” Macao became a rising star just a few years after it was returned to China, and China helped Macao open its doors to foreign companies and liberalize the gambling market. Stanley Ho’s and STDM’s reign was also coming to an end, as many overseas operators came to Macao to set up shop, including Steve Wynn, Las Vegas Sands, Caesars Entertainment, and MGM.

The number of foreign visitors also increased. According to the Statistics and Census Service (DSEC), over 39 million visitors passed through Macao in 2019.

Macao offers a gambling experience that you won’t find anywhere else in the world. Combining the world’s most popular casino operators and local culture resulted in over 40 magnificent places for high-rollers and casual gamblers alike.

Venetian Macao is one of the most popular casinos in Macao. It’s the second-biggest casino in the world, with nearly 550,000 square feet dedicated to gambling. Venetian Macao hosted over 100,000 people during the Chinese New Year in over 3,000 game rooms.

Macao’s popularity comes from the casino’s VIP rooms. Those locations are exclusively reserved for guests willing to spend tens of thousands of dollars in one casino night. VIP guests are high rollers, and they get special privileges and rewards from the casino hosts.

Opening the VIP rooms was China’s brilliant plan, which resulted in high revenue after the first decade of Macao’s transformation. Nearly three-quarters of the city-state’s entire gambling revenue comes from those high-stake players and VIP guests. The allure seems to be staying strong, as millions of players from all over the world come to Macao to experience VIP gambling.

In the Western world, when you think of gambling, you’ll probably think of poker, or maybe slots. However, while Macao has plenty of excellent poker rooms, it’s still the most famous gambling destination for baccarat lovers.

Chinese people prefer baccarat over other casino games, like poker or slot machines. Baccarat is a simple and exciting game to play, so even beginners can enjoy playing it. On the other hand, casinos have a low house edge in this game, so many customers come back for this reason. Still, low house edge or not, Macao’s revenue from baccarat was $15 billion in 2019.