Beijing has impacted the casino industry in Macau since their launch of the junket operator crackdown. The government has targeted corruption, crime, and gambling in hopes of stopping the abuses that have existed with regards to high interest rate VIP loans and other crimes associated with gambling. Macau was considered a hot gambling location in the world, as well as the “Las Vegas of Asia.” However, the crackdown has been affecting the revenue for many casinos and some projects are on permanent hold. Revenue for October 2015 fell 28.4 per cent compared to October 2014. It is the 17th month of decline, according to Macau’s Gaming Inspection and Coordination Bureau. December 23, 2015, an announcement that Beijing is asking Macau to change their services occurred. The announcement states Beijing is still going to make it difficult for VIP gamblers, and would like to see more family oriented services.
One way Beijing is limiting casino operations is to withhold the amount of casino tables allowed. Studio City Casino opened in October and was given permission for only 200 casino tables, which is half the amount planned for the new space. About 95 per cent of the gaming income in Macau comes from tables, so it was a big hit to the newly opened casino.
Casino operators understand the revenue is not coming back to the way it once was. They know VIP business is in a structural decline and it is not going to come back. Now all that can be done is to follow the paradigm shift to increase revenue and ensure those working in Macau will not suffer job losses.
China has come up with a plan called the Thirteenth Five-Year Plan, which is looking to focus on family entertainment as a new draw for tourism to Macau.