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The Competition Of The Gaming Industry

Decent Essays

Characterizing Competition
The gaming industry in Macau is very competitive as it is the only jurisdiction within China where casinos are legal. Before 2003, there was a restriction on the entry of citizens into Macau when it was operated by Stanley Ho’s S.T.D.M as a monopoly. By 2012, visitors had increased 18.6% from the previous year and the industry now runs as an oligopoly. Within this industry are many competitors at a total of 6 within a 29.7 square kilometer area. They are Sociedade de Jogos de Macua, Galaxy Casino, Wynn Resorts, Ventian Macau, MGM Grand Paradise and Melco PBL Jogos which give a total of 34 casinos in Macau (Peng, M., pg 412).
Institutional Developments
Many institutional developments have helped shape the industry. First was the requirement that now allows Chinese citizens to visit Macau as the number of visitors and gross gaming revenues increased. Gaming operations also had supply-side dynamics by institutional factors such as Law no. 16/2001 and Administrative Regulation no. 26/2001. This gave the industry a chance to hold contracts for up to 20 years and expanded the monopoly into an oligopoly. In 2002 the number of gaming tables was around 339 and slot machines at 808. Once the industry expanded, Macau had 5,302 table in just 9 years with 16,056 slot machines (Peng, M., pg 413). This alone is a huge source of revenue growth for the gaming industry in Macau.
Lastly, junket operators were legalized. They are middlemen who lend high-rollers money

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