Diversity the new game for Macau as gambling revenues tumble
As Macau marks 15th anniversary of handover, its heavy bet on casinos is showing signs of strain
When inaugural chief executive Edmund Ho Hau-wah threw the liberalisation dice that took Macau's flagging gaming industry into the 21st century in 2002, few could have predicted its stellar rise to become the top city for global gaming, leaving Las Vegas in the dust.
Heady double-digit growth year after year over the past decade had industry watchers and casino bosses alike salivating that a seemingly unending flow of customers and cash from the mainland would continue to deliver the riches to the former Portuguese enclave.
But this year is one that most investors would rather forget. "A perfect storm" and "death by a thousand cuts" are how some industry insiders are describing it; 2014 saw the largest year-on-year revenue drop on record, and, significantly, in October - usually a peak season. Overall, Macau is poised to record its first full-year casino revenue decline.
Macau also finds itself at a critical juncture. Both central and local governments have made it clear that the city must diversify into areas other than gaming. That refrain has grown louder with warnings in recent weeks from senior officials that Macau should be able to evolve into a hub for entertainment, meetings and conventions alongside nearby Hengqin Island as part of the Zhuhai special economic zone.
In July, Pansy Ho Chiu-king, daughter of the original Macau casino tycoon Stanley Ho Hung-sun, identified global competition as the biggest threat to Macau's future and pledged to promote Macau as a world-class tourist destination.
More than a decade ago, the city's fate and ambitions seemed markedly different. As Macau's handover to Chinese rule in 1999 loomed, the city plodded on under an ineffectual Portuguese administration that struggled to quash organised crime groups coming in to cash in on the twilight years of Stanley Ho's 40-year casino monopoly.