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Macau Clubs Eclipses Las Vegas Resorts
For many years,
the former Portuguese colony of Macau has been hailed as “Asia’s Las
Vegas”. However, when researching and comparing both reported and
unreported casino revenue of the two locations, Las Vegas should be
honored to be considered “North America’s Macau.” The clubs of Macau
have significantly eclipsed the resorts on the Las Vegas Strip.
At the 13th
International Conference on Gambling and Risk-Taking, Sean Monaghan, a
Merrill Lynch casino analyst discussed the revenues of the two casino
hotbeds. Monaghan said the Macau casinos’ reported $5.6 billion in
revenue had been compared to a similar win by Las Vegas Strip casino
resorts.
However,
Monaghan pointed out that the tax rate in Macau is 40 percent. This
high tax rate has caused “a significant underreporting of actual
revenue of the market.”
“So people
think $5.6 billion is almost as big as the Las Vegas Strip and all
that,” challenged Monaghan, who operates out of Singapore. “It’s
probably $2 billion, at least, bigger than that.
Monaghan
continues, “It’s probably incontestable, it could be corrupt money.”
Monaghan has titled such unreported funds “funny money.”
Rising
competition between junket operators that manage VIP players could be
another reason for the underreporting of revenue from Macau casinos
suspects Monaghan. There does however seem to be a significant
decrease in VIP play at Macau’s casinos. Monaghan once again has his
theories; in this case he blames the Chinese government for cracking
down on “certain people going there and spending money they shouldn’t
have had.”
University of
Macau’s Ricardo Siu said that in the past few decades, influence from
outside investors and new government regulations assisted in the shift
in management of Macau casinos. Unfortunately, deep-rooted interests
are making progress slow coming.
Preventing
casino players from money-laundering by tracking large sums of money
is not very easy in Macau. Wu Yi Wang of Macau Polytechnic Institute
points out that many Chinese high-rollers prefer confidentiality.
But, 90 percent
of Macau’s casino guests are among China’s newly rich. This group is
not big on concerns of confidentiality.
The slackening
of gambling restrictions and traveling rules has resulted in an
economic boom for Macau. Macau is a blip of an island, located some
40 miles west of Hong Kong. In 1999, after more than four hundred
years of Portuguese occupation, the island was returned to Chinese
sovereignty. Macau does however have economic and legal autonomy.
Asia is
currently experiencing a “decade of massive change” and, according to
Monaghan, Macau’s economic boom and the flourishing of its casinos are
but another part of it. “The whole world is looking at Asia,
particularly after the success of Macau,” said Monaghan.
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