China will maintain crackdown on overseas gambling

Significance

Chinese President Xi Jinping’s crackdown on gambling and illicit capital flight has resulted in moves against offshore betting, and Macau’s decline as a gambling hub has encouraged more Chinese clients to head to South-east Asia. Despite the associated economic benefits, governments there are cracking down on gambling operators over attendant criminal activity.

Impacts

• Official warnings against gambling are unlikely to deter most Chinese gamblers.
• Chinese gaming operators will continue to move to nearby countries with looser regulations, including Myanmar, Nepal and Palau.
• Macau’s economic model will transition to entertainment and mass market gamblers, but profits will not be as high as in the VIP junket era.