Macau needs more than just casinos to drive its economy

IT looks like Macau's glory days of rampant VIP and premium mass gaming are over - at least for now. The former Portuguese enclave, the world's largest gambling hub and the only place in China where casino gaming is legal, has seen its fortunes take quite a tumble over the past few years.

Macau's gross gaming revenue for November fell 19.6 per cent year-on-year, with the 24.3 billion patacas (S$3.9 billion) earned the lowest monthly total since September 2012. This sixth consecutive monthly dip will probably see Macau finish the year with a total just shy of the US$45 billion in 2013, which would represent the first annual decline in gaming revenue in a decade.

Chinese President Xi Jinping, who visited the special administrative region last week to mark the 15th anniversary of Macau's return to Chinese rule, was spot on when he stressed that the territory must diversify itself to ensure its sustainable development. The casino gaming sector - which injected more than US$45.2 billion in 2013 - accounts for over 80 per cent of Macau's economy, according to estimates from the Gaming Teaching and Research Centre at the Macao Polytechnic Institute. Such a heavy dependence on one sector means that Macau remains extremely vulnerable to economic disruptions.