Sunday, 21 December 2014

Macau's Reversal of Fortune?

Chief Executive Fernando Chui and Chinese President Xi Jinping have a toast
Today Chinese President Xi Jinping marked the 15th anniversary of the handover of Macau back to the motherland, but it may also signal the end of its free-wheeling days.

In his speech, Xi called on the Macanese government to find "greater courage and wisdom" to "strengthen and improve regulation and supervision over the gaming industry".

Seems the President is expanding his anti-corruption campaign to Macau, but is Chief Executive Fernando Chui Sai-on the best person to deal with this? He doesn't seem to have a good grip on how discontented the Macanese are with his leadership, or rather his lack of authority.

Chui now has to come up with a concrete plan to shift Macau's economic model from one that currently sees more than 85 percent of taxes coming from casinos. When asked how he would go about doing this, he responded the government would "undertake a review" of the casino industry in spring of next year, ie the earliest would be after Chinese New Year.

Macau's dependency on gambling will have to change
In the last few weeks, Macau's casino takings have sharply fallen due to the anti-corruption campaign as well as the economic slowdown on the mainland.

China will also launch a crackdown on the flow of illicit funds through casinos, overseen by the Ministry of Public Security. This also means VIP junket operators, who bring in high rollers and arrange financial credit for them, will be closely monitored.

Many gamblers transfer funds through their UnionPay ATM and credit cards, and the security  ministry's Economic Crimes Investigation Bureau will be watching for suspicious transactions...

Xi also mentioned resisting "foreign interference", which could mean targeting specific casino operators who may have angered Beijing. Wonder who is on this hit list?

In the meantime, can someone please explain to Xi that it's not the casino operators' fault, but his own citizens who have this incredible urge to gamble?

These casino operators have tried desperately to diversify entertainment with shopping and shows, but mainland visitors aren't interested in fine dining restaurants, historic landmarks or entertainment -- they just want to have fun by throwing down wads of cash on the slim chance of winning big.

The other big question is, casino operators are currently spending millions building their next phases to incorporate more entertainment as well as gambling tables. Can they afford to have mainland visitors drop to a trickle?

Xi's edict also reveals Chui has not been an effective leader at all -- something the Macanese have known all along. But is Chui the man to fix things with an iron fist? Issues like housing and transportation are crying out for attention, but the government has been too busy counting money to tackle these problems.

Perhaps one good thing that may come out of Xi's anti-corruption campaign in Macau will be that the city will be cleared out of mainlanders and then Hong Kong people can enjoy it again without having to fight the crowds!

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