Macau has gone from the world’s fastest-growing economy to its biggest loser

BANGKOK, Thailand — Macau, China’s sole gambling mecca, is the inverse of Las Vegas. 

Its tiled promenades are tidy and largely free of panhandlers. There are no flashing pyramids, but plenty of stone facades designed centuries ago by Portuguese craftsmen. Inside its 30-plus luxury casinos, gamblers tend to gulp milk tea instead of Jack Daniel’s.

In recent history, Macau has been a raging success story. It has become the world’s most profitable gambling city, raking in more cash between a few of its casinos than the whole of the Vegas strip — all without descending into disorder and open sleaze.

But Macau’s run of good luck is over. The coastal enclave, long flush with mainland Chinese cash, was recently declared the world’s fastest-plummeting economy.

And it ended 2015 with a grim statistic: year-on-year gaming revenue nosedived by just over a third to roughly $30 billion, according to government data. That’s like losing the entire GDP of Cambodia or Senegal at slot machines and card tables.

Macau’s gloom, described by one Hong Kong bank as a “death spiral,” is not about to dissipate anytime soon.

Part of Macau’s downturn can be blamed on China’s overall economic slump. As the only Chinese territory where casinos are legal, Macau soared in the past decade alongside the explosion of Chinese wealth. 

But the glitz and glamor of its casinos — one of which is topped with 24-karat gold-gilded cupolas — was paid for by a boom era that China may never replicate again. 

The crash is also attributed to a crackdown led by China’s President Xi Jinping. Pervasive corruption, he warns, could bring on the “downfall of the state.” 

So he’s crusading to purge every official who’s illegally funneling government funds into their private accounts. This campaign has brought heavy scrutiny to any large sums moved off the mainland — including cash transfers to Macau.

Before the crackdown, high rollers from Shanghai to Shenzhen were easily courted by brokers, some linked to organized crime, who beckon the super rich to Macau’s casinos. These middlemen serve a dual purpose: doting on the wealthy gamblers like royalty while loaning them gobs of cash to be repaid with interest.

Called the “junket” system, it has attracted tycoons and dodgy politicians alike. It’s also notoriously slippery. The American gambling magnate Steve Wynn, whose casino empire stretches to Macau, has described these operations as a “giant, entrepreneurial pyramid scheme” and said monitoring its operators is “almost impossible because they multiply like rabbits.”

Communist party chieftains and their cronies, feeling the government’s gaze upon them, are now rightfully afraid of jaunts to Macau where they may be accused of spending ill-gotten funds or laundering money.

And since China’s corruption crackdown shows no signs of stopping, Macau may be forced to reinvent itself.

There is plenty of excess in Macau, where the skyline is dominated by behemoth gambling complexes — one of which claims to be the largest casino on earth. But Macau has never embraced the brand of in-your-face debauchery epitomized by Vegas. 

Inside Macau's Grand Lisboa casino, Feb. 11, 2007.

In lieu of strip clubs, prostitutes operate discreetly out of hotels. There are no bachelorette parties spilling drinks on casino carpets and few beggars on the streets. The areas surrounding its casinos are replete with lovingly preserved structures dating back to Macau’s Portuguese colonial era, not run-down pawn shops like in Vegas.

The subdued card game baccarat dominates Macau’s casino floors; raucous craps tables, surrounded by cheering players, are in short supply. Gamblers in Vegas are treated to free booze from cocktail waitresses. Players in Macau drink tea doled out by women in pantsuits.

But Macau, though worlds away from Vegas, is nevertheless tapping the Vegas playbook to ensure its survival. Macau is now desperately shoring up family-friendly entertainment options to attract China’s massive emerging middle class. 

One casino complex recently opened the world’s first Ferris wheel shaped like a figure 8. Alternative in-house entertainment includes a “4D Batman simulator ride.” Families staying at another prominent casino are invited to wake up early and eat breakfast (promoted as “Shrekfast”) with a guy in an ogre suit. Cost per child? $17.

Yet another casino, The Venetian Macao, has built indoor canals plied by gondoliers crooning in Italian — just like they do at The Venetian resort in Vegas. But Macau will find it much harder to flourish on tourist attractions like $16 gondola rides than it did in the heady days when officials casually dropped $250,000 on a single hand of baccarat.

Editor's note: This article originally stated that Macau had no "fake Eiffel Towers." In fact, as of Oct. 2015, it does. The story has been amended accordingly.