Economics of Macau, Gambling, and Capital Flight


Macau, although known to be Asia’s premier gambling capital and sometimes referred to as the “Vegas of China,” is also one of the richest regions in the world since being handed back to China in 1999. Macau, formerly a Portuguese colony is now under Chinese sovereignty under the “one country, two systems” arrangement as a Special Administrative Region since being handed back to Beijing in 1999, like Hong Kong SAR.

With a nominal GDP per capita of roughly $86,000 and a GDP PPP per capita basis of $115,000, Macau ranks 2nd in the world for both, according to the World Bank, ahead of countries like Singapore, Switzerland, Germany, Hong Kong, Canada, Tokyo, USA.

Some speculate that by 2020, Macau will also be the richest place on the planet. [1]

Macau is not only one of the richest regions in the world, but it also has the highest population density (people per km sq), with a population of 667,000 in an area of just 32.9 km squared. To put that into perspective, Hong Kong is roughly 35x bigger than Macau, Singapore is roughly 19x bigger, and Tokyo is nearly 10,000 larger, according to the World Bank.

If the casinos aren’t attractive enough, another reason why Macanese people are richer than the rest of the world is that the Macau government actually hands every local permanent resident 10,000 patacas, or $1250 USD per year. Non-permanent residents still get 6,000 patacas, or $775 USD. This massive wealth handout, the Wealth Partaking Scheme, begun in 2008, in the wake of the global financial crisis. [2]


Macau’s main industry is its resort and gambling. So we have to compare Macau to Las Vegas.

Fancy resort hotels and casinos line the streets. Yet, only 50% of Macau visitors stay overnight, as Hong Kongers can easily take a 45-minute ferry to and from, while most mainland Chinese people are from Guangdong province, which is also visible from the island. In Las Vegas, 99% of visitors will stay overnight.

Interestingly enough, despite being one of the richest per person country, attracting nearly 30 million visitors per year (mainly from mainland China), the average gambling budget in Macau is only $250, compared to Las Vegas’s gambling budget of $620.

In terms of games played, tourists generally prefer table games such as Baccarat played in private VIP game rooms, which account for 90% of Macau’s gambling revenue. Contrastingly, Americans generally prefer slot and machine games, integrated alongside table games.

Macau has 49 casinos, while Las Vegas has over 100 to choose from. Las Vegas also attracts more annual visitors, at 42.9 million. Even then, overall gambling revenue in Macau is at $28 billion which easily beats Las Vegas’s $11.1 billion per year. If those figures aren’t enough reason to prove to you that the house always wins, then I don’t know what will.


Macau is notorious for capital flight. Mainland Chinese and Hong Kongers will travel to Macau to withdraw cash.

To tackle this capital flight and money laundering, mainland authorities have implemented facial recognition technology and bank scanners across all Macau ATM’s. The move comes after withdrawals from Macau cash-dispensing machines had reportedly surpassed HK$10 billion per month (roughly $1.3 billion USD)

The new cash dispensers are to scan millions of bank card users at ATMs across Macau in an unprecedented move by mainland authorities to tackle money laundering and capital flight – the rapid flow of money out of the country in contravention of strict currency controls. The scanning only applies to holders of China UnionPay cards issued on the mainland.

Of the 30 million visitors to Macau last year, 20 million were from mainland China.

Capital flight, money laundering, and underground activities are all serious issues that China wants to crack down on. Citizens moving large sums of cash out of the country is not only economically bad for the country but also poses political threats as to what projects the cash is being used to fund. These ATM’s are just one phase of fighting money laundering, financial crime, and the funding of terrorist groups.



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