When the good times are rolling, why change? Macau's leaders know they need to make the city's economy less reliant on gambling, but with tax revenues from the gaming industry flooding in, making a clean break is challenging. Some experts do not believe that a new ruling allocating casino tables based on inclusion of non-gaming features is enough economic protection. There are those who call for investment in industries that support and complement gaming; others seek projects that are far removed.
President Xi Jinping is among officials who have called for diversification, the justification being that income could easily be affected by an economic downturn, competition or visa policy changes. Gaming accounts for 80 per cent of tax revenue. But gambling is the reason for the city's financial success; revenue rose 18.6 per cent last year to US$45 billion. GDP grew 10.5 per cent and unemployment was a mere 1.9 per cent - so low there are not enough local workers for upcoming casinos and associated entertainment and shopping hubs.
Casinos and their investors have seen spectacular earnings; the five biggest gainers on the MSCI Hong Kong Index last year were casino operators, with record prices and valuations going to three-year highs. Forbes magazine's list of Hong Kong's richest people had three casino magnates in the top 12, the highest being Galaxy Entertainment chairman Lui Che-woo, who rose from fifth to second. Macau's gaming boom helped to more than double his net worth to US$21 billion, it said. Two children of Stanley Ho Hung-sun were ninth and 12th.
Macau surpassed Las Vegas as the world's biggest gaming centre in 2007 and its annual revenues are now seven times higher. Such success has made officials reluctant to develop other industries. But the bankruptcy last year of the US city of Detroit, unable to move beyond the decline of the American car industry, proves the need. Pressures from a population seeking better opportunities also require diversification.
Chief Executive Dr Fernando Chui Sai-on has suggested a theme park. Other lawmakers have pointed to neighbouring Hengqin Island for opportunities. For inspiration, they can look to Dubai and Abu Dhabi, which have turned to education as an insurance for when oil revenues dry up. Macau's gaming-based single economy is safe for now, but it cannot always rely on gamblers; it has to creatively search for other revenue sources.