Macau Meltdown in the Making?

The success of Macau as the Vegas of Asia has brought much in the way of revenue and jobs to the area. This has been a success story much hailed in the industry over the past several years. However, changes by the Macau government to the gaming industry has rocked the faith of both the stock market and casino companies.

The announcement that the world’s biggest gambling hub was to be reviewed regarding expansion was unexpected. There has been some agreement by the casino license holders that it was important that it ‘shouldn’t expand infinitely’. However, rather than simply monitoring development it seems that the regional government has its eyes set on changing legislation that will dramatically affect the casinos in the region.

A statement has been posted onto the Macau official website that declares there may be significant changes that will limit slot machine locations and also will change the age restrictions for both players and workers. The proposed age change would mean raising the age to 21.

Other changes may affect the number of gambling tables that the licensed casinos are allowed to have.

Much of Macau’s success has been due to it being the only Chinese city where casinos have been given a license and are legal. This made the location hugely popular with Chinese businessmen, wealthy travellers from Hong Kong and for people all around Asia where gambling restriction are strict and commonplace.

Macau has been one location that, despite a couple of small economically blue months, has been extremely resilient to worldwide recession. Citigroup alone expects revenue from the area to be in the area of $1.4 million for September alone.

Stock markets did not react favourably to the news of government meddling and many of the giants saw stocks tumble with the announcement.

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