The future of gambling for China
Goodbye Las Vegas.
When one thinks about the world’s top gambling destinations, places like Vegas and Monaco would ordinarily come to mind. However, in the latest data received this week, as reported by Yahoo! Finance, Macau has once again shown growth that far outstrips the global gambling numbers.
Macau has long been a popular destination for gamblers around the world. Many predicted that last year’s growth results were as a result of a decline in US and European casino traffic. However, this Special Administrative Region of China has reached unprecedented growth figures in revenue of 13%.
Massive growth for Macau
To out these figures into perspective, Las Vegas generated $6.5 billion in bets in 2013. Macau did $4.4 billion in March 2014 alone. The reason for these astronomical figures is that Macau does not rely on the smaller stakes gamblers, as one would find in Vegas. Between 70% and 80% of Macau’s revenue is generated by the HNWI (High Net Worth Individuals) sector. A main contributor to this influx of HNWI’s is the proximity of Shanghai, which is only a 150min plane ride away. Being the financial capital of China, this city attracts many of the world’s leading businesspeople.
However, this growth is not only linked to Macau’s physical casinos. Due to the fact that many countries – most notably the USA – have banned online casinos to be based on their home soil, many international online casino operators have looked to places like Macau to set up their servers and base.
The appeal of China for foreign operations
The appeal of Macau is vast. Compared with other regions, it is already gambling-friendly. The Chinese government has also put stops in place that make it appealing for international gaming companies to invest there. It is no secret that Macau is considered the gambling capital of Asia, and this reputation has spread across to other parts of the world. It is now commonplace to find online casinos themed around Macau, where in the past one would ordinarily find Vegas as the main theme, if the theme was destination-based.
Online betting in China
For those who are interested in accessing online casinos based in China, there are many websites dedicated to this. One such site is http://www.gamblingland.com where players from around the world can view unbiased reports on over 300 casinos – some of which are based in China.
Not only has China become a main attraction for land based casino visitors, but it has taken this success online. Today, it offers many world-class online casinos where one can find a mixture of popular Western games like poker and roulette, interspersed with some quirky new games that also offer great player experience. The rise in popularity of the Chinese online gambling industry only augurs well for the future of the international industry as this has injected much-needed competition. Right now, the sky is the limit for China. And with its billion-plus population, there is no shortage of players.
Concerns mount regarding Chinese economy
David Ignatius is one of the more balanced commentators you’ll find, so when he write a piece stressing “warning signs” in China, it’s worth a read.
The government in China is trying to address the staggering amount of corruption, yet this effort seems to be having a destabilizing effect. Also, there are tons of bad loans in China and what appears to be a massive real estate bubble.
All of this spells trouble, and recent real estate sell-offs and bond sale cancellations have observers worried.
Macau – A gambling Revolution
Despite gambling now being a worldwide craze, China and many countries in Asia continue to ban it in many places, as a result many tourists who head over to China now head over to Macau to let their hair down and go to a casino.
Due to gambling being illegal in most of China, many visitors decide to take a trip to Macau in order to enjoy some casino entertainment. Macau is now considered as serious competition to Las Vegas when it comes to attracting tourists who are interested in playing casino games.
Macau offers a gambling experience that is different to that which is on offer at many western casinos, as many of the casinos on offer eastern variants on traditional casino games that you will not find at any of the top western casino resorts.
Furthermore Macau also offers historic and famous casinos that should be of interest to any visitor. Two of the oldest casinos in Macau are the Casino Lisboa and Grand Lisboa, which create a distinct historic interest for anyone who wants to learn more about the development of casino gambling there.
However Macau also has a modern feel and offers much more to offer visitors in 2013, including the quite spectacular vision it provides at night. Every evening the lights on the outside of the building are switched on to create the effect of an giant neon pineapple. At the same time the interior décor retains serious kitsch appeal – since it has remained the same since the place was opened back in the 1960s
With its mix of culture and history mixed up with a feel of being in Las Vegas, there’s no wonder many people are visiting Macau to experience a casino feel incomparable to playing Lucky Nugget online slots.
China pushes its economic leverage
The rise of China and its impact on economies all over the world isn’t a new story, but this overview in the New York Times is worth reading. The tone is one of looking at the downside of China’s economic empire and the unwillingness of desperate partners like European nations to assert themselves. But there is an upside, as China can provide much needed capital to struggling countries, and this also gives China a huge stake in stability around the world. There are certainly concerns on issues like the environment and human rights, but one needs to look at the big picture as well. Fortunately, President Obama’s foreign policy is aimed at engaging but also containing China, and he has been willing to use our own leverage in this relationship.
Challenges for shale gas in China
The shale gas fracking boom in the United States has been a game-changer for the US economy and energy needs. Now other countries are looking to exploit this potential in their own country, and the potential in China is huge. That said, there are also many challenges to making this a reality in China.
In China there’s a giddy feeling that the next energy gold rush is about to begin. Beneath the mountains of Sichuan province, the deserts of Xinjiang, and elsewhere, China contains twice the shale- gas reserves as the U.S., says the U.S. Energy Information Administration. China’s national planners enthusiastically back boosting natural gas production, which accounts for just 4 percent of the country’s total energy mix now. The government wants to double that share by 2015. “There’s a lot of exuberance,” says Zhou Xizhou, who leads the research firm IHS Cera’s China Energy practice. “In Beijing, if you work in energy, you probably receive a shale-gas conference notice every week.”
The impact of a shale-gas boom in China will be enormous, with the potential benefits and likely environmental costs perhaps even greater than in the U.S. So far, though, the output in China has been a trickle because of the challenging geography and the monopolistic structure of China’s oil and gas sector. While about 200,000 of the horizontal wells used in fracking have been drilled in the U.S., China has about 60. China has 1,275 trillion cubic feet of shale-gas reserves, compared with 637 trillion cubic feet for the U.S.
The U.S. shale-gas revolution was launched largely on the flatlands of Texas, North Dakota, Pennsylvania, and other accessible areas. In China’s mountainous Sichuan basin, “the formations seem to be more faulted and folded, which makes it more difficult and less economic to drill long horizontal well bores,” says Briana Mordick, an Oil & Gas Science Fellow at the Natural Resources Defense Council and formerly a geologist at Anadarko Petroleum.
It will be interesting to see how this develops. Some environmentalists hate the fracking boom, while others acknowledge that new natural gas tends to replace the much dirtier coal as an energy source, which is a huge plus for the environment. China’s future coal plans have terrified the rest of the world. If they can figure out fracking, perhaps the net gains in carbon emissions can be mitigated.
Posted in: Business, Economy
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