Gambling in Macau has been legal since the 1850s when the Portuguese government legalized the activity in the autonomous colony. Since then, Macau has become known worldwide as the “Gambling capital of the world” or “Monte Carlo of the East“.
Gambling tourism is Macau‘s biggest source of revenue, making up about 50% of the economy. Visitors are made up largely of Chinese nationals from mainland China and Hong Kong. With the entry of large foreign casinos from Las Vegas and Australia, Macau overtook the Las Vegas Strip in gambling revenues in 2007.
However, the gambling industry is also a source of instability in the Macau economy, as the nature of gambling business is not susceptible to technological advancement or productivity growth.
The gambling business is still dependent on the prosperity of other Asian economies, especially that of China.
In addition, a proliferation of other gambling venues in the region is drawing the target demographic away. Macau’s 2018 grew 13% over the prior year, but this lagged behind the 41% growth in emerging casino markets in Singapore, South Korea, Philippines and Australia, according to Fitch Ratings. In 2019 casino earnings reached their lowest level in three years.