China trying to clean up Macau and stop Violence

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Up until this year, Macau’s tremendous growth was showing few ill side effects. Business was booming, and the violence that had affected this gaming mecca during the 90’s had all but disappeared. However, the violence has resurfaced in a big way following several murders, gang violence, and the vicious beating of casino owner Ng Man Suh.

China doesn’t want to see this gaming crown jewel experience a decline, so their government has been working hard to clean up the area. And a large part of this clean-up effort has been aimed at gambling junkets, which extend credit to high rollers.

Because high rollers aren’t always willing to pay back money following losses, some junkets use threats and even violence to encourage repayment. That said, the Chinese government recently arrested a few workers associated with junkets. And while no charges have formally been announced, the arrests serve as a message that these companies need to follow local laws or face legal action.

Unfortunately, this crackdown on gambling junkets also has a negative effect on Macau’s casino revenue. With more restrictions placed on junket companies, high rollers are traveling to Macau less frequently. And because high rollers are wagering less, Macau revenue growth has slowed from the blissful period experienced from 2009 until now.

Of course, even with slowed growth, this casino destination is still far larger than any other gambling hub in the world. Macau casinos pull in over five times the revenue that the second biggest gaming destination – Las Vegas – earns each year. And the area has also made a larger commitment to providing more non-gaming entertainment in an effort to increase casual tourism. Taking all of this into account, it may be a while before Macau experiences any serious decline.

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