In Macau, Pawnshops Bankroll Mainland Gamblers

Across from casino mogul Stanley Ho’s Grand Lisboa in Macau, flashing neon lights invite cash-strapped gamblers to pawn their Rolexes and other valuables so they can return to the gaming tables. In almost any other city, these “receptacles of misery and distress,” as Charles Dickens termed pawnshops, thrive in times of economic downturn. Not in Macau, where they help fuel a casino business whose revenues are more than six times those of the Las Vegas Strip. The shops enable the mainland Chinese who crowd the gaming tables to sidestep China’s currency controls.

Gambling revenue in the city of 576,000 people will climb 16 percent, to a record $44 billion, this year, Credit Suisse Group estimates. The growth will be driven by ordinary visitors from China as operators try to cut their reliance on high rollers. Unlike VIPs, these gamblers don’t have ready access to casino-linked credit lines. “Unofficial funding channels, such as pawnshops, are likely to gain more importance as the casinos are keen to attract more premium mass gamblers,” says Gabriel Chan, an analyst in Hong Kong for the Zurich-based bank.