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Gaming wealth comes at a cost for Macau

Tapping into gambling as a mainspring of economic growth can create its own problems, as Macau is finding out. Among fresh reminders, authorities on the mainland - the main source of customers for Macau's casinos - have clamped down on visas for visits to Macau by officials, casino high rollers and now ordinary visitors. To inject some social equity into windfall gains from the casino boom, the Macau government has resorted to giving cash bonuses to residents - not the best means of bridging a widening wealth gap.

These steps highlight unwelcome social side effects of gambling and a gaming-led economy. But neither is a long-term solution. Tourism, after all, remains an important pillar of Macau's economy. The mainland is the dominant source of visitors. Cutting back on them for long will hurt other sectors. And cash handouts will do nothing to rein in inflation, which is hurting the majority who have not shared in the benefits of the gaming boom.

By imposing restrictions on freedom of movement, mainland authorities, typically, are treating symptoms of social problems instead of the root causes. To be sure, officials and businesspeople visiting Macau are often distracted by the lure of a quick profit on the casino tables, not to mention those who do not mind gambling with taxpayers' and shareholders' money. But where there is a will there is a way and Macau cannot be put on visitor rations for ever. Rooting out corruption and raising the standards of accountability and corporate governance will be more effective in the long run, along with closer scrutiny of casino operations by Macau authorities. As for ordinary tourists, they are not known for paying multiple visits to the casinos.

Both Macau and Beijing need to look at structural problems, such as a wage gap driven by the casinos. Handouts do nothing in the long term to help small and medium-sized businesses struggling for survival against crippling costs. Nor will they help find jobs for a future pool of uneducated former card dealers lured into quitting school early for big money. Only by thinking outside the roulette wheel will the government find sustainable solutions.

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