Gaming reliance poses ‘structural risk,’ study warns

Two Chinese academics have warned, based on a study they conducted, that Macau’s dependence on gambling has brought considerable economic gains to the territory but represents “structural risks” for the financial stability of the city and mainland China.

The paper, published in the Global Gaming & Tourism Research journal, an academic journal under Macao Polytechnic University, traces Macau’s gaming-led expansion since market liberalization in 2002.

The study’s authors, Jinan University researchers Zhong Yun and Hu Zhouqin, argue that the city’s economic diversification drive remains deeply anchored in the gaming industry.

Their research details that Macau’s gaming taxes contributed 70% to 80% of government revenue between 2010 and 2019. By 2024, gaming tax revenue reached MOP88.12 billion in Macau, representing nearly 80% of all public revenue.

The research also noted that Macau’s hospitality sector expanded significantly alongside gaming, with its share of gross domestic product (GDP) rising from 1.6% in 2003 to 5.9% in 2024.

However, the study also reports that these non-gaming facilities mainly serve as assets to strengthen the appeal of gaming operations, improve profit margins, and extend visitor stays. The study argues that the Covid-19 pandemic exposed these weaknesses when border restrictions hit gaming and tourism, leading GDP to collapse from MOP444.1 billion in 2019 to MOP202.0 billion in 2020.

Simultaneously, it highlighted that the local labor market has become tightly bound to the casinos. The authors note that employment in gaming and related industries climbed from roughly 23,500 workers in 2002 to about 82,900 in 2025.

Financial policy concerns

The authors warn that the cash-based nature of the sector and cross-border capital flows create potential financial security risks. Specifically, they note that gambling activities can be exploited for money laundering when mainland residents turn to underground banks and illegal channels to transfer funds in order to circumvent strict foreign-exchange controls.

Looking ahead, the authors recommend using Macau’s “1+4” economic diversification strategy to strengthen leisure tourism, improve gaming regulation, and deepen regional cooperation through the Greater Bay Area.

The study concludes that the next stage of development will depend on whether Macau can turn non-gaming activities into independent growth drivers.