The stumbling Chinese giant

The 3d rendering of many casino chips falling

It’s a little too early to tell what China’s precarious economy means for the rest of the world. Whatever happens in China is clearly a big deal – not just for the billions of people within its borders, but for the intrinsically interdependent world in which we all try and coexist.

The recent shocks to the Chinese stock-market (which up until now seemed to be blessed with run of unending growth) not only made the surrounding Asian markets look considerably shaky, but also sent shockwaves across Europe and the Americas.

Chinese economic issues have also had an immediate impact on the world’s casinos. In this article we take a look at how that is playing out.

Taking a gamble on crime

Macau is one of the world’s gambling hot-spots, and most of the clientele of Macau’s casinos come from mainland China.

A huge market of wealthy gamblers has been created in recent years by the booming stock-market. However the sharp plunges have slashed the fortunes of many and left previously high-rolling gamblers dangerously short of cash.

After a number of high-profile incidents, the casinos of Macau have now taken the unusual step of taking out insurance policies to protect themselves in the event of any of their patrons being abducted for unpaid gambling debts.

Money-lenders need to make a profit too

Macau is a special administrative region of China, and also the world’s largest gambling hubs. Local money-lenders rely on the tourists from the mainland for business. Visitors from the mainland need the local money-lenders because the central government of China limits the amount of cash that people can take from the mainland to Macau, so the gamblers turn to the local money-lenders for extra cash.

If a gambler has a losing streak, and doesn’t have the available funds to pay their debts, then the money-lender needs to find another way to recover what is owed.

Why would casinos be liable for an abduction?

Kidnappings or abductions that have happened so far in Macau have occurred in the hotel room in which the gambler is staying. This means that the casino resorts could face a lawsuit from the victim or their family for failing to equip the property with sufficient security measures.

This is why the Macau casinos are taking out insurance policies – to cover the legal fees if an unlucky gambler tries to shift the blame and the costs associated with their abduction.

How big a problem are the abductions in Macau?

So far in 2015 official reports put the number of gambling-related abductions at 170 – that’s more than double the number of gambling-related abductions that were reported in 2014. Like with most things associated with gambling, a lot of things don’t get reported, so the assumption is that the actual number of abductions is considerably higher than the official figures indicate.

It is clear that the casinos of Macau are having a tough time. Their revenue and profits are down as a result of the weakened Chinese economy, and now they are having to cope with increased crime. However they are still generating much bigger revenues than their counterparts in Las Vegas and have ambitious plans to invest billions more in new casino complexes. If you’re planning your visit just be cautious about borrowing too much money.

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