For more crisp and insightful business and economic news, subscribe to The Daily Upside newsletter. It's completely free and we guarantee you'll learn something new every day.

One sector in China's economy is full of big, risky bets and loving it.

Macau, the gambling mecca of the East, has wrestled the status of the world's most profitable betting hub from Las Vegas, The Wall Street Journal reported.

Luck is Turning Around

China's economy has taken a lot of blows lately. After lifting covid restrictions later than much of the world, its recovery has been delayed. In July, exports dropped 14%, the country's biggest dip in more than three years. In addition, the property market is in the dumps with few new buyers and many developers defaulting on massive loans. Meanwhile, youth unemployment is so high that China's National Bureau of Statistics recently stopped collecting the data altogether.

But now that tourism is open for business and people are free to move about the country again, Macau is quickly reclaiming its edge over other major gambling cities like Singapore and Las Vegas:

  • The number of Chinese mainlanders who visited Macau in July was 1.9 million, slightly below 2019 levels. But in the first six months of 2023, Macau generated $10 billion in gambling revenue, compared to Vegas's $7.5 billion.
  • High-rollers still aren't as abundant as they once were, but even low-end gamblers tend to bet more than $1,500 at the tables per hour, the WSJ reported.

Beijing Snake Eyes: It's not all triple 7s for Macau, though, as the majority of its visitors are from the mainland, Hong Kong, and Taiwan. It doesn't have much international appeal right now, so it risks relying too heavily on locals and next-door neighbors. The Chinese government also is requiring that casino companies like MGM, Sands, and Wynn cut back their reliance on gambling and instead diversify with hotel offerings, concerts, and other attractions. So Beijing is basically telling casino operators to refocus on tourists -- just not their main reason for being there.