Study warns Macau casino reliance creates structural financial risks for China

Two Chinese academics from Jinan University’s Institute of Economics have published a study analysing Macau’s heavy reliance on the gambling sector. The research shows that while casino revenues have driven rapid economic growth, fiscal gains and urban development since the 2002 liberalisation, the concentration of revenue – between 45 % and 60 % of Macau’s GDP and up to 80 % of public fiscal income – creates “riscos estruturais” for both Macau and mainland China.

The authors highlight that capital flows from the mainland to Macau’s casinos can facilitate money‑laundering and bypass currency controls, posing a threat to China’s financial stability. They also note that the sector’s high wages and job concentration limit labour mobility, hindering the emergence of diversified industries such as technology, finance and health. The COVID‑19 pandemic exposed this fragility, with Macau’s GDP falling sharply in 2020. The study concludes that, despite ongoing diversification efforts, gambling will remain the dominant revenue source in the short to medium term, keeping the region vulnerable to external shocks and financial risks for the Chinese economy.