Macau is well-known as the biggest gambling hub in the world as it provides millions of people interested in gambling activities with the opportunity to experience them in the most luxurious way. The authorities in China recently drafted a proposal which aims to make online gambling legal on Hainan Island and redirect some of the gambling potential in that direction. This move has the potential to reshape the gambling industry and the way it works in the region, making it more diverse.
It is known that China has a ban on gambling in the mainland territories of the country and this means that Macau is the only alternative players have when it comes to gambling. The special administrative region provides players from around the world with the chance to participate in gambling activities. The southern province of Hainan is considered an alternative to Macau by the authorities and they are pondering the idea of allowing online gaming, lottery, or even sports betting within the boundaries of the island, as this is the first step of creating a new gambling field.
In order to make the transition smooth and prepare the ground for the new gambling field, the government has been investing billions in the construction of new highways, high-speed railways, as well as attracting international brands such as Hilton, Westin, and St. Regis.
Aftermath of the Proposed Measure
Even though the process of legalization is still in its early stages, President Xi Jinping considers this move a positive change and supports the government agencies which have introduced the draft proposal. This move will be the initial stage of developing a new gambling sector, as it could open the perspective of building brick-and-mortar gambling venues on the territory of Hainan in the future. Many people in the field are looking forward to the changes introduced by the government since many of them are expected to affect directly people.
Together with this proposed plan for introducing online gambling and sports betting in the island of Hainan, the government has made public its plans for changing the rules regarding issuing visas and even working on the construction of a new airport near Dongfang city which will make the access to the location even easier. Some experts in the field claim that one of the main reasons why the government is considering making the move now comes from the fact that the region is currently going through a rough patch finances-wise and has to come up with ways to mend the fiscal deficit which looms over the island of Hainan.
Following the official announcement of the news, several casino stocks in the region witnessed a drop in their amount. Wynn Macau Ltd. which has also suffered from the sexual misconduct fiasco, saw a drop of 6.7 percent, whereas MGM China Holdings Ltd. slid as much as 1.5 percent. Sam Chi Yung, a Hong Kong-based strategist with South China Financial Holdings Ltd., stated that many investors were surprised by the announcement since this move will redirect some of the players away from Macau and towards Hainan. This move could potentially threaten the integrity of the gambling hub and make a hit on the gambling revenue of many major casino operators managing businesses there.