MACAU (AP) — Hordes of Chinese high rollers flooding into Macau have turned the city into an Asian casino boomtown but they're also posing a challenge for China's next generation of leaders.
Macau's casino industry has mushroomed over the past decade after its government eased restrictions, drawing a flood of mainland Chinese visitors that have helped supercharge the economy, created tens of thousands of well-paying jobs and made vast fortunes for a few U.S. gambling kingpins. But a looming leadership change in China is making some wonder whether blistering growth in the tiny enclave will remain a sure bet.
China holds a once-a-decade Communist Party Congress starting Thursday that will usher in new leaders who might already be uneasy about Chinese citizens spiriting wealth outside the mainland to Macau in violation of capital controls as well as the huge profits being made there by U.S. casino companies.
They could try to make their mark by introducing new policies aimed at curbing the rampant corruption that has become one of the biggest challenges to the Communist Party's power. Such a crackdown would likely stem the flow of money and tourists to Macau, an hour by ferry west of Hong Kong. In the year through September, some 28 million people, most of them from mainland China, visited the city of just 500,000.
"The primary risk to the gaming sector, I believe, comes from the Chinese side, and it will come from the end of acquiescence to this vast capital control abuse and a crackdown on corruption," said Steve Vickers, a former head of intelligence at Hong Kong's police force who is now chief executive of business intelligence and risk consultancy SVA.
Billionaire Sheldon Adelson's Las Vegas Sands Corp. and Wynn Resorts Ltd. thrived after expanding in Macau following the end of a four decade monopoly in 2002. They now make the bulk of their profits from their casino-resorts in the former Portuguese colony. Some 90 percent of Sands' profit comes from Asia, including half from its Macau properties.