The Effect of Online Gambling on Macau’s Casino Industry

Macau is a rich gambling region that derives 90% of its tax revenues from land-based casino gambling in the area. The country is classified as a Chinese Special Administrative Region and is therefore excluded from the outright gambling bans of the Chinese mainland.

The six licensed casinos in Macau brought in $24.8 billion between January and August 2019 but has faced a rough start to the year with the interruption of the COVID-19 pandemic, which caused revenues to plummet by 84.6%, to a much lower $4.5 billion over the first eight months of this year.

This has spurred a response by one of the country’s lawmakers to urge the government to step up and legalise online gambling to offset the losses incurred so far and to further develop the gaming industry in the region.

A Balance in the Mix

Lawmaker, Jose Maria Pereira Coutinho has stated that he believes that it is vital for Macau to nail down regulation on online gambling in the country so that it can be used to increase gaming taxes in the future.

It seems apparent that he is all for a controlled environment with the view of developing distinct software in-house. This may see little hope for remote casino operators getting in on the action, however, could be the best foot forward if internet gambling is to be legalised.

There is, after all, a massive industry to consider and protect if the market is going to go this way.

Online May Threaten Existing Business

There are notable examples in the past where online gambling was legalised and the land-based industry took a knock. It is for this very reason that Nevada, USA has strived to keep online gambling sites to sports betting and poker alone, as the effects on the land-based casino industry could be massive if general casino gaming were allowed online.

If online gambling were to be legalised in Macau, they would need to put a lid on it to protect their land-based companies and preserve job creation in the country.

It is vital for business to be conducted digitally these days, so the idea has its merits, but like many of the states in the USA have done, it is necessary that the land-based casinos be given first dibs on operating online as a subsidiary business measure.

This way, it remains a win/win for all parties concerned. The government remains the receiver of a stronger and more diversified market, while the casinos remain in control without a threat to their daily business.

Round-Up

The inclusion of online gambling should be welcomed with open arms in Macau, but some savvy tactics and wise heads must come together to make sure that not only the economy stays intact, but that it can surge forward in years to come.