China currently doesn’t have any casinos in its mainland. However, all of it will change soon. The province of Hainan is going to be visited by the Chinese president this week. Hotel magnates such as Zeng hopes that the Chinese president is going to have a favorable gift to the gambling industry by providing new tax concessions in order to attract more tourists in this part of China. Hainan is a tropical destination that is along the South China Sea and is near the Vietnam border.
There is already the presence of investments in this spot. In fact, both local entrepreneurs along with global firms such as MGM Resorts International have already spent some money on the seaside developments.
Hoping for the Best
Many investors are still hoping for the best. They hope that one day in the near future, Hainan will become a haven for Chinese gamblers who will boost the economy in the area. However, even today, those companies will have to deal with the fact that gaming is still banned in mainland China. Also, the island offers only attracts few tourists as of the moment.
Xi Jinping will be speaking at the Boao Forum just in time for the 40th anniversary that China’s economy was opened to the world. A lot of Hainan’s elite businessmen though don’t really expect that Xi will announce legalization of an entire gambling industry in the island. However, they are actually hopeful that the policies to be unveiled will make a huge difference. For starters, they are hoping that the changes will help draw more tourists. And for a lot of experts, they believe that it needs a policy roadmap that will most likely include regulated casinos.
Capturing the Local Tourists
One of the main goals of opening Hainan to local gamblers is because of the fact that it offers a large potential profit. To give you an idea, there are Chinese jet setters that take around 130 million trips abroad each year. According to government estimates, they are spending lavishly in different parts of the globe including Las Vegas, Bali, and Paris.
Macau is the place where casinos are permitted. However, it is true that a bulk of its income doesn’t actually go to Chinese businesses. Instead, the majority of the revenues go directly to foreign operators such as Las Vegas Sands Corp. and MGM. Now, there is a nationalist angle regarding the move towards legalizing the gambling industry in Hainan.
For Zeng Xianyun, who is a hotel magnate, he asks why is it that the house is foreign? He is hoping that China can legalize the gaming industry and make Hainan as the very first province to ever have casinos. And if this is done the right way, he believes that capital outflow can be minimized.
He said that “We need to take the issue seriously instead of avoiding it”. He also added that “we can’t let this big cake be eaten all by foreign capital”.
For now, businesses can only hope for the best. It is true that there is a chance that Xi will consider legalizing gambling in this part of China considering the money involved in gambling.