Macau ponders future even as tourists and gamblers return

Macau's streets were packed in the run-up to the Lunar New Year after pandemic controls were abruptly lifted but it is far from business as usual as the Chinese casino hub wrestles with questions about its future.

Tourists may now be back, but Beijing wants the former Portuguese colony to diversify its casinos-reliant economy.

Yet quitting gambling -- and the huge tax revenues casinos generate -- will be a hard habit to break.

The city of some 700,000 is the only place in China where casinos operate legally and for years has relied on mainland Chinese gamblers as its economic lifeline.

Last year Macau saw gaming revenues plunge to a record low of $5.2 billion after the government shut down most businesses at the height of a coronavirus wave.

In December, the government awarded new decade-long concessions to all incumbents, effectively keeping the status quo but adding new requirements for non-gaming investment.

The firms have since pledged a total of $14.9 billion on projects including theme parks, convention and exhibition centres, fine dining and performance venues.

VIP guests contributed around 15 percent of industry earnings before the pandemic, but the majority of this would be "permanently gone" due to regulatory concerns, according to analysts.

"China's multi-year campaign against capital outflow and cross-border gambling carried on, rather than eased," they wrote earlier this month.