Macau, a special administrative region of China, is the only place in China where casinos are legal. Gambling has been legal since the 1850s when the Portuguese government legalised the activity in the autonomous colony. After the handover of Macau from Portugal to China, Macau and the business has grown at a high pace since 2001, when the government ended the four-decade gambling monopoly of the Hong Kong billionaire Stanley Ho. With the entry of large foreign casinos from Las Vegas and Australia, Macau overtook the Las Vegas Strip in gambling revenues in 2007. Since then, Macau has become known worldwide as the "gambling capital of the world", grossing the highest amount of gambling/gaming revenue and greatly dwarfing all the other gambling centres/cities.
Gambling tourism is Macau's biggest source of revenue, making up about 50% of the economy, and gaming taxes making up 75% of Macau's government revenue. Visitors are largely from mainland China and Hong Kong.
History
In an attempt to generate revenues for the government, gambling in Macau was legalized by the Portuguese government in 1849.Godinho, Jorge (2012) "A history of games of chance in Macau, Part 1 : Introduction", in Gaming Law Review and Economics, Vol. 16, no. 10, p. 552-556, and (2013) "Part 2 : The foundation of the Macau gaming industry », Gaming Law Review and Economics, Vol. 17, no. 2, p. 107-116. In the late 19th century, the government introduced a licensing system for the fantan houses (Chinese gambling houses). It is reported that over 200 gambling houses were required to pay gambling rent to the government. The second casino monopoly concession was granted to the Tai Heng Company in 1937. The company was, however, too conservative to fully exploit the economic potential of gambling.
The industry saw a major breakthrough in 1962 when the government granted the monopoly rights to all forms of gambling to Sociedade de Turismo e Diversões de Macau (STDM), run by Stanley Ho. The STDM introduced Western-style games and modernised the marine transport between Macau and Hong Kong, bringing millions of gamblers from Hong Kong every year. The license was extended in 1986 for another 15 years but expired at the end of 2001.
Over a three year period in the late 1990s, as wave of gang violence referred to as the casino wars occurred disrupted Macau's casino industry. The casino wars were largely attributable to rival Triad groups who sought to gain control of Macau's illicit industries before Portugal transferred the territory back to China. The Portuguese authorities of Macau mostly failed to address the violence, which resulted in 122 deaths, or to catch those responsible.
Macau was transferred to the People's Republic of China in 1999 and became a special administrative region of China. During this transition, there were no changes to gambling policy in Macau.
In 2002, the Macau government ended the monopoly system and granted three (later six) casino operating concessions (and subconcessions) to: Sociedade de Jogos de Macau (SJM, an 80% owned subsidiary of STDM), Wynn Resorts, Las Vegas Sands, Galaxy Entertainment Group, the partnership of MGM Mirage and Pansy Ho Chiu-king, and the partnership of Melco and PBL. On 18 May 2004, the Sands Macau casino opened near the Macau Ferry Terminal. Today, there are 16 casinos operated by the STDM, and they are still crucial in the casino industry in Macau.
Economic aspects
Macau's economy relies heavily on gambling. Nowadays, the gambling industry generates over 40% of the GDP of Macau. Since the early 1960s, around 50% of Macau's official revenue has been driven by gambling. The percentage remained steady until the late 1990s. In 1998, 44.5% of total government revenue was produced by the direct tax on gambling. Then there was a 9.1% decrease in 1999, probably due to internet gaming. After the handover of Macau from Portugal to China, the SAR released gambling licenses to other companies to eliminate the monopoly played by the STDM. In 2002, the government signed concession contracts with two Macau gaming companies, Wynn Resort Ltd. and Galaxy Casino. This opened the gambling market for competition and increased government tax revenue significantly. It also attracted more tourists to Macau.
As of at least 2015, 90% of tourist revenue in Macau is derived from gambling.
However, the gambling industry is also a source of instability in the Macau economy, as the nature of the gambling business is not susceptible to technological advancement or productivity growth. The gambling business is still dependent on the prosperity of other Asian economies, especially that of China. Due to Xi Jinping's promise on cracking down of corruption across mainland China, casino profits from across Macau have been reporting a decline in monthly profits In addition, a proliferation of other gambling venues in the region is drawing the target demographic away. Macau's 2018 grew 13% over the prior year, but this lagged behind the 41% growth in emerging casino markets in Singapore, South Korea, the Philippines and Australia, according to Fitch Ratings. In 2019 casino earnings reached their lowest level in three years.
In 2020 Macau had a decline of 56 percent in revenue, and the number of monthly visitors fell from approximately 3 million before the COVID-19 pandemic to fewer than 1 million in 2021. The unemployment rate increased from an average of 2 percent over the past decade to 4.6 percent in the first quarter of 2022. In August 2025, Macau casinos set a post-COVID record of $2.76 billion – the highest number since January 2020.
Taxes from gambling revenues fund a robust welfare system and an annual cash payment to Macau's citizens.
Gambling forms
Casinos Macau has 41 casinos (as of 2019), of which the biggest is The Venetian Macao. Twenty-four casinos are located on the Macau Peninsula and 17 in Cotai. They all operate under a government franchise and under a common set of rules. The main casino operators in Macau are SJM Holdings, Galaxy Entertainment Group and Las Vegas Sands with respective revenues of 9.7, 4.8, and 4.2 billion in 2011.
A form of VIP contractual system called the junket trade operates in Macau. Junket agents recruit high rollers to Macau and advance the high rollers credit for gambling. The practice developed in the 1980s, when Stanley Ho began subcontracting private gambling rooms in his casinos to independent agents.
A wide range of games are available, including roulette, blackjack, baccarat, boule, Sic bo, Fan Tan, keno and slot machines. Chinese gamblers generally prefer table games, the most popular of which is baccarat. Only approximately 5% of annual gaming revenues come from slot machines.
The punto banco version of baccarat is most common and, because it is purely a game of chance, offers the best odds of any table game in Macau's casinos. Baccarat is the sole game played in Macau's VIP rooms. Taxes derived from baccarat are the single largest source of public revenue in Macau.
Common conventions among baccarat players in Macau include chanting, blowing on cards, banging the table, and "squeezing" the cards. "Squeezing" the cards refers to folding over the sides and corners to slowly reveal the points value of the cards, rather than simply flipping them over. Although punto banco baccarat is a pure game of chance on which no rational bet can be made, many gamblers record the succession of Player or Banker wins in an effort to discern patterns. Gamblers typically do so on a chart called the Big Road on which Player and Banker wins can be recorded so that streaks can be readily observed. The popularity of tracking such results among gamblers in Macau has led to the practice being used at casinos throughout the world where Chinese people gamble.
Poker was introduced only in August 2007, in an electronic table format at Galaxy Starworld casino. The first live poker tournament was the Asia Pacific Poker Tour Macau event in November 2007. Shortly thereafter, in January 2008, the government of Macau published the official rules for Texas hold 'em poker games in Macau. In February 2008, Grand Lisboa Casino added the first live-dealer cash game tables. In May 2008, 'PokerStars Macau' opened at Grand Waldo Casino. In November 2008, Texas Holdem' Poker opened at Wynn Macau. 'PokerStars Macau' moved to a new location at the Grand Lisboa Casino in March 2009. Today, Wynn Macau, StarWorld, and the Venetian offer live-dealer cash game poker tables.
Over the opposition of the casino industry, Macau implemented smoking prohibitions in casinos in October 2014. At the start of 2019, the restrictions were extended to Casino VIP rooms. These changes were largely motivated by the concerns of croupiers, who spoke out against their unhealthy work environments.