Life and Times in Macau - The Gambling Capital

When hearing the words “The Gambling Capital of the World,” quite a few people would think of Las Vegas. While Sin City may be the king of gambling in America, other places in the world can certainly give it a run for its money.

Today, we’ll cover the true “Gambling Capital of the World”: Macau. In 2019, the city made $36 billion in revenue – six times that of Las Vegas. This feat only gets more impressive when you realize Macau has only a tenth of Vegas’ total land area!

We’ll go in-depth about Macau’s history, from its early days as a trading gate to the developments that led to its modern-day dominance.

The 1500s: Ou Mun and A Ma Gao

The earliest known settlers in Macau were fishermen and farmers. They called the area “Ou Mun,” meaning “trading gate” since it was right at the mouth of the Pearl River. It soon became a part of the Silk Road, supplying silk to ships heading to Rome.

Another name for Ou Mun was “A Ma Gao,” named after A-Ma, the patron goddess of sailors. This name eventually became Macau, after Portuguese merchants arrived in the early 1550s. They established a city that quickly became one of the world’s biggest trade hubs, drawing in ships from all over the world by offering Asian goods.

Goods weren’t the only thing being exchanged, however. Saint Francis Xavier converted a large portion of Macau’s residents to Christianity, building many churches that can still be seen today.

The 1800s: Macau's Trading Era Ends

After being a trade center for hundreds of years, Macau lost its prosperity when the Dutch and British took control of East Asia’s major trade routes. The British established Hong Kong as the primary trade port in 1842, leaving Macau a quiet, backwater port town.

Thinking of ways to revitalize Macau’s economy, the Portuguese government decided to legalize gambling in 1847. One of the most influential figures in the gaming industry was the Hou Heng Company, led by Fok Chi Ting. They became the only company licensed to operate various casino games, giving them a monopoly over the industry.

Beginning their operations at the Central Hotel on Avenida Almeida Ribeiro, the Hou Heng Company completely revolutionized the industry. They pioneered practices like providing free opera performances, food, and cigarettes to patrons.

Early on, betting on animals was rarely seen. “Greyhound betting” was organized by the Macau Canine Club and even held in a special stadium known as the Yat Yuen Canidrome, but wasn’t very popular.

Organized horse racing emerged in 1927. Club Internacional de Recreio e Corridas de Macau held the same monopoly on horse racing that Hou Heng had on traditional casino games, holding races in the Areia Preta horse racing ground.

1937: Gambling Starts to Grow

While Macau already had a decent selection of gambling activities, the casino industry experienced a meteoric rise in 1937. The Portuguese administration gave ownership of the casino monopoly to the Tai Heng Company, led by Fu Tak Iong and Kou Ho Neng.

They transformed the Central Hotel into their flagship casino, bringing in several new casino games from the West. Among those games was Baccarat, the most popular casino game at the time.

In 1942, the gambling industry suffered a small blow due to the Sino-Japanese War. Macau was a neutral territory, but Hong Kong was negatively affected by the conflict. This led to the closure of greyhound and horse betting since those events were only sustained by customers from Hong Kong.

1961: Gaming Becomes the Heart of Macau

While gaming had been a major economic force in Macau for a while now, it was the 119th Macau governor that made it official. In February 1961, he designated Macau as a low-tax region, declaring that gaming and tourism were its two primary economic drivers.

Thanks to this, Macau began to flourish. While rife with organized crime, Macau continued to rake in huge profits from the gaming industry. It had a unique approach compared to other places, as it focused on wealthy individual customers, offering private VIP rooms with high-stakes games.

Casinos were built around the VIP rooms instead of the other way around. Since most other areas catered towards the masses, gambling in Macau became a wholly unique experience.

1999: Macau Rejoins China

In April 1987, Portugal reached an agreement with China to return Macau back to them in 1999, under provisions giving Macau autonomy for 50 years after the start of Chinese rule. With its own government as China’s Special Administrative Region, Macau went through extraordinary economic growth at the start of the 21st century.

Gambling and gaming became significantly more popular, along with increased tourism as the world began moving forward. In 2001, casinos accounted for 40% of all tax revenue. Ten years later, casinos accounted for a whopping 81% of all tax revenue.

A huge part of this growth was the government’s decision to break the casino monopoly. A company called Sociedade de Turismo e Diversões de Macau held the sole license to operate casinos for decades until 2001.

From 2002 onward, the government began handing out casino licenses to multinational companies. These include some of America’s biggest names like MGM, the Galaxy Entertainment Group, and Wynn Resorts.

2020: The Pandemic Impact

Unfortunately, recent years have had an unbelievable impact on Macau’s revenue. With tourism and gaming being the driving forces behind its economy, China’s strict Covid policies essentially crippled the industry. This was only compounded by a government pushback against gambling in Macau, lowering its monthly revenue in 2022 to $300 million compared to Vegas’ $659 million.

Despite all this, Macau seems to have bounced back, recording $15.57 billion in gross gaming revenue as of May 2023. This marks the fifth consecutive report of growing revenue figures, a testament to Macau’s title as The Gambling Capital of the World.