CHINA: Explosive growth in Macau set to continue amid fears of a widening social gap

Record ID: 451918

  • Title: CHINA: Explosive growth in Macau set to continue amid fears of a widening social gap
  • Date: 10th June 2010
  • Summary: VARIOUS OF SLOT MACHINES AMERICAN GAMING ASSOCIATION PRESIDENT, FRANK FAHRENKOPF ON PODIUM (SOUNDBITE) (English) AMERICAN GAMING ASSOCIATION PRESIDENT, FRANK FAHRENKOPF, SAYING: "For it is really here in Asia that we see the strongest sign of the gaming industry recovery form the worldwide recession. In fact, the gaming business here in Asia is booming." VARIOUS OF SLOT MACHINES
  • Embargoed: 25th June 2010 13:00
  • Keywords:
  • Location: China
  • Country: China
  • Topics: Arts / Culture / Entertainment / Showbiz,Lifestyle
  • Reuters ID: LVAVUBAYOFTCWZZR1IPC9OSNFY3
  • Story Text: Asia will overtake the United States in gaming revenue within the next five years, according to a survey presented to industry experts at the Global Gaming Expo Asia, which began in Macau on Tuesday, (June 8).
    The survey predicted torrid growth in the local gaming sector with Macau holding onto its top ranking despite competition in Asia.
    Macau, the only place in China where casino gambling is legal, alone generated $14.5 billion U.S. dollars of revenue last year, while the entire U.S. market saw a figure of $30.74 billion U.S. dollar.
    "For it is really here in Asia that we see the strongest sign of the gaming industry recovery form the worldwide recession", said Frank Fahrenkopf, president of the American Gaming Association. "In fact, the gaming business here in Asia is booming."
    Asia's booming population and increasing disposable income will enable the region to see torrid growth at least until 2013.
    Macau's gambling revenue is likely to rise 30 per cent in 2010, roughly doubling previous forecasts amid a string of new records in monthly gambling revenue.
    Macau casino revenue surged almost 95 per cent in May to a record $2.1 billion U.S. dollar, following a 70 per cent year-on-year jump in April, when revenue rose to a previous record $1.76 billion.
    But it is not all plain sailing for the former Portuguese enclave.
    Ironically, Macau also has to overcome obstacles posed by its own government. These obstacles include a proposed cap on table games, proposed limits on travel restrictions, the change in plans for the reclaimed land meant for casino operators being given to social housing projects, as well as the proposed tobacco ban.
    Although Macau's chief gaming regulator told Reuters Beijing had not asked Macau to tighten visa issuance for visitors from China, there are ongoing concerns that China was trying to cool red-hot growth in the world's largest gambling market.
    Macau's explosive growth in recent months has reignited fears that Beijing may renew restrictions on mainland Chinese gamblers traveling to the enclave to prevent the world's largest gambling market from overheating.
    "Along with opportunities come challenges, of course, and top of mine, and for many in Macau, are the proposed limits on foreign workers, the proposed cap on the number of gaming tables to be allowed along with the possible reclamation of land originally designated for casino development," said Fahrenkopf.
    Since reverting to China in 1999, Macau, an hour away from Hong Kong by ferry, has flourished as one of the world's wealthiest cities.
    The territory's economy has soared in recent years -- much of the wealth generated by the enclave's casinos.
    Indeed, the former Portuguese colony has become a playground for China's nouveau riche.
    But Macau legislator, Jose Coutinho, says that gambling comes hand-in-hand with other social problems such as prostitution and organised crime.
    The involvement of the triads in Macau's casinos is centered on the murky and highly profitable junket business.
    The VIP sector brought in $9.9 billion last year, two-thirds of the enclave's total gambling revenues.
    Macau has about 187 licensed junket operators and are crucial because they ensure the flow of capital by extending credit to gamblers, often millions of dollars on a visit.
    They assume responsibility for collecting on their loans -- at times indelicately, authorities say.
    They also often assume management of the private VIP rooms. And while many law-abiding junkets are active in Macau, experts say the industry is highly susceptible to criminal influence given the extra-legal functions and opaque environments in which they work.
    Coutinho says even if crime groups are involved in the junket business with the casinos making so much money, the government reaping huge taxes, and the citizens of Macau enjoying full employment, there is scant political will to remove them.
    He says that he has no doubt authorities turn a blind eye to organised crime, if not actively engage.
    "They have removed the pension fund for the police force, they have not given a single house after the hangover to the security forces. So this affects their moral. This affects the way if thinking for their future and so if they are attracted by the gaming sector paying twice the salary of that they are getting in the civil service, you are not getting the best in the civil service. Theta's the bad side of the story. That affects quite a lot the progress of the (sic) Macao as being an international city," he said.
    But despite the problems associated with Macau's gambling boom, some there have found ways of servicing the industry through ingenious, if not mystic ways.
    Hidden away beyond a warren of dingy corridors in a downtown industrial building, Feng Shui master, Sze To reads palms and faces to heal the sick, exorcise bad spirits, and most often, help with people's fortunes.
    Sze is also called in by casinos to correct bad feng shui, an ancient Chinese belief in the placement of objects to get a good 'chi' -- particularly in VIP gambling rooms.
    Though master Sze was away filming a TV series in Australia, his apprentice, Phillip Ng, says both punters and those in the gambling industry seek his master's advice on how to win or how not to lose money.
    He said they have an 80 per cent success rate on predicting a winning streak.
    "Our master can help them reading the face and the palms and give them some advice in terms of time to go into the casino," said Ng. "But most of them, they have greedy, because they think it's not enough money. After they, over time they will lose again."
    The trick, he added, was knowing when to stop.
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