Macau.

    Macau, an erstwhile Portuguese colony, and now one of the two Special Administrative Regions of the People’s Republic of China, is on a peninsula in the Pearl River Delta  connected to the Chinese mainland.  There are also two islands, Taipa, and Coloane, which belong to Macau. Macau is close to Hong Kong, from where most of the visitors come. As the crow flies, Macau is only 41 miles away and a high-speed ferry can take you between these two places in slightly more than an hour. The place is of course known as a major gambling venue in the world, on a par with Las Vegas. Well, by now, gambling interests in Las Vegas have firmly settled on the island, so we may as well call the place Las Vegas East. The island operates with a high degree of autonomy; it has its own laws, police force, monetary system, and immigration policy.

    Macau used to have only 6 -9 million visitors per year, but in 2012, some 18 million visitors showed up. This year they are expecting more. This large increase is related to the many new gambling casinos in the Las Vegas style, and the sharp increase of Chinese tourists worldwide. Anyway, visiting Macau is fun, but be prepared to deal with hordes of other tourists. In a recent newspaper article*, it was reported that there were in China 2.96 inbound trips and 83 million outbound trips in 2012. Since China has 1.3 billion inhabitants, this calculates to 2-3 trips per person per year. That makes for a lot of Chinese tourists. Yes, Chinese are getting wealthier now and all over the world you may have noticed the sharp increase in Chinese tourists. You can easily distinguish them, even if you are blindfolded,  because they have a tendency to speak much louder than really necessary. You can sshhhh all you want, it is not going to help.

Gambling is huge in Macau. In early 2014 casinos were valued at an astounding 21 EV/EBITDA (enterprise value/earnings before interest, taxes, depreciation and amortization. Gaming revenues were $45 billion, or about seven times that of the Las Vegas Strip. Taking a cue from the gamblers, investors were pouring money even at this unrealistic high levels, but in the subsequent months of 2014 the price dropped to a more reasonable 12 times.

But hotels ares still packed, and gambling floors are so packed one can sometimes hardly move around.  So the operators hiked prices and there are few places at tables left where you can sit for less than $100/hand.  What drives all this is of course the growing wealth of the Chinese and consequently the sharp increase of people rich enough to sit at these tables.

    If you just want to do the sights of Macau, one day is probably enough. It is just a small island and the new casinos look like, well, casinos. If you want to do the Las Vegas gambling/shows circuit, you may want to stay there 2-3 days. Stanley Ho, the nonagenarian doyen of Macau, used to control all the casinos in town until a few years ago when Las Vegas interests swooped in and started to build competing casinos. That doesn’t make him too happy of course, and there is even statue of him giving the finger to all those new trash. So by now you find many casinos in town faithfully reproduced from their Las Vegas originals and sometimes you wonder; am I in Macau or am I in Las Vegas. 

    Even the weather cooperates; in the summer it can be just as hot and humid as in Las Vegas and the casinos are havens of air-conditioned luxury. Why so many casinos? The number of casinos in Macau is about the same as in Las Vegas, but their gross intake is reportedly five times as much. Much of this is due to the booming Chinese economy and because Chinese are well-known as inveterate and big gamblers. Going into a casino and looking at the gamblers is an eye-opening experience. You will never see so many gamblers hunkered down and looking so fixedly and intently at their dice, cards, or whatever. It is frightening to see so many gambling addicts together.

    Anyway, the upside is that as a Macau resident, you don’t have to pay any income taxes. Sounds just like Monaco. The casinos make enough money to pay for everything in town. I did not check out how easy (or hard) it was to become a Macau resident. Although Macau is part of China, they have certain advantages and other special attributes assigned to them. Macau has their own currency, the pataka, and one HK$ is worth 1.03 patakas. But because there are so many visitors from Hong Kong, you can very well get around with HK dollars only. The stores will give you change in HK$, if you pay in HK, and change in patakas if you pay in patakas. You can use patakas and HK$ in Macau, but in Hong Kong the shops will not accept the pataka.

    With the sharp increase in visitors, there is obviously pressure to upgrade the port and immigration facilities to receive these waves of people, all eager to drop money in the gambling machines. The main ferry terminal is now being remodeled to handle the ever-increasing stream of visitors. The casinos, fearful of losing their clientele’s time because of delays in getting into the country and into their casinos, have built another separate ferry terminal for visitors to their casinos. From there you can step in any of the free casino buses which will whisk you to the gambling emporiums.  You can also fly into Macau, if you want to avoid the long lines at the immigration booths at the ferry terminals, where the unwashed masses usually come in.

    Anyway, it is a nice and interesting place to visit. My parents have visited this island a few times for relaxation in the 1950-1960 period, but things have obviously changed drastically since then.

* The Straits Times, October 2, 2013, page A7