Contrary to popular belief, Las Vegas is not the gambling hub of the world. This honor belongs instead to the city of Macau, so much so that the authorities are seeking to curb further casino development. In a surprise announcement, the government of Macau passed a ruling stating that they will temporarily halt the issuing of new licenses and freeze all land deals that may have been made for the construction of new casinos in the city. Macau has seen an influx of gambling giants over the last few years which has contributed to its booming success. However, some locals are concerned over the gaming explosion.
The city’s chief executive Edmund Ho made the announcement that new casino growth will be curtailed and no further licenses will be granted. Six companies currently have license, including Wynn, Sands, Galaxy and Crown. The news has been welcomed by Australian billionaire James Packer, however. Packer’s Crown casino group has been developing casinos and hotel properties in the city with Melco PBL Entertainment and the announcement has opened the doors for the agreement to gain some much needed ground against their competitors.
Crown Macau, which is run by Packer’s company, will be joined by the new casino The City of Dreams in March 2009. The first phase of the construction is already under way.
Part of the government’s decision came from the social tensions among the populace that feel the gaming boom has not helped the local economy – despite raking in an estimated $10 billion in 2007. The new policies have come all the way from the central government in Beijing. There have been numerous assessments and discussions about the decision and how the gaming industry has grown in the city and the people involved feel that the larger casinos are simply taking over.
Currently there are three casino licenses and three casino sub-licenses that have been issued to the six main companies that already have casinos in the city. These licenses have allowed 29 establishments to be built and operated in Macau and there is hope that the halting of the licenses will help consolidate the gaming industry as it currently stands. The government realizes that the decision may cause some of the smaller casinos to close their doors or merge with the larger ones. The casino boom in the city has not sat well with some of the populace and has spawned anti-government protests over the growing economic gap.
Macau has been faring better than Las Vegas in the current economic crisis in the United States and it remains to be seen how this licensing halt will affect the gambling industry overseas.