A Brief History of Macau
Macaus history is quite extensive and plays a major role in its modern existence. Macau alternatively spelled Macao, is more officially known as the “Macau Special Administrative Region of the People’s Republic of China”. Macau (Chinese 澳門; 澳门;) literally translates into “Bay gate”. This name comes from its centuries of use by the Portuguese Empire as an essential Eurasian trading port. It is a tropical peninsula on the south east coast of mainland China. Included in Macau is the island of Taipa and Coloane, connected by bridge. Macau occupies the western side of the Pearl River Delta only 64 kilometers away from Hong Kong. The Macau Peninsula borders Guangdong province of Mainland China to the north and lies nestled along the South China Sea on it’s East and South Sides. There are roughly 636,200 people living within this small 30.3 square kilometer region. This Makes Macau the most densely populated region in the world.
Macau’s history is long and complicated. The relationship between the Chinese and the Portuguese was not always one of trade and friendship. The Portuguese originally claimed Macau in 1511 but were forced out by the Chinese empire. The Malaysian Malacca Sultanate had warned the emperor of China of the Portuguese during what is now known as the age of discovery by the west. His letters foretold the Portuguese use of trade as an excuse to conquer territories, and this warning was heeded by the Chinese for several decades. It saw Portuguese ships met with hostility at nearly every encounter with China. Merchants and other Portuguese settlers were killed and jailed by the Ming Dynasty.
A positive relationship between Portugal and China did not resume until the 1540’s when the Portuguese aided in eliminating coastal pirates. Trade began again in 1549. In 1557 Macau was rented to the Portuguese Empire by Ming Dynasty China for commercial use as a pivotal trading port under Portuguese control. In 1622 the Portuguese defeated an attack by the Dutch. As more ports opened along China’s coast, and especially after the British took possession of
Hong Kong, Macau’s economy suffered. In an apparent attempt to generate revenue, the Portuguese legalized gambling in 1844. Finally, in 1887 Macau became an official colony of the Portuguese, recognized by China and it remained that way until Dec 20, 1999 when it was turned back over to the Chinese.
Gambling in Macau and Macau’s Independence
The Portuguese didn’t allow gambling in a legal form until 1844. Prior to this legalization, other trading ports throughout Asia caused the economy to falter in Macau. Many speculate that this was the inspiration for the legalization of gambling in Macau. Some of the first casino’s to open up in the region were opened by Lou Kau, a man sometimes referred to as the father of gambling in Macau. One of his mansions is a popular tourist attraction today and can be visited to gain insight into his life. It is known as the Lou Kau Mansion. It was the place he loved most, and also the place where he hung himself after an addiction to gambling led to the loss of his great wealth.
Portugal ceased paying rent to China and declared itself independent from the Chinese in 1848. Thereafter it began enforcing a tax on Chinese citizens living in Macau. All this was due to the the economic collapse of Macau as a trading port caused by the great success of the Victorian trading port in Hong Kong run by the British.
The Macanese Slave Trade
From the time Macau declared it’s independence to the 1870’s, Macau was infamous for its trade of “coolies” or slaves from southern China. Most were kidnapped in the Guangdong province and shipped to Cuba, Peru, and other South American ports to work on plantations or in mines. Many would die on these packed vessels due to malnutrition, disease, or other afflictions by the Portuguese slave traders. The Dea Del Mar lefron from Macau to Callao in 1865, only 162 of the slaves on board survived out of an initial 550 Chinese slaves. This was a dark period for Macau during desperate economic times.
Macau in World War II
During World War II, much of the Eastern Hemisphere was in major chaos. Macau
became a center for refugees seeing its population explode from 200 thousand to nearly 700 thousand people in just a few years. This lead to food shortages in Macau causing rationing of food and even cannibalism in some cases.
The Japanese respected the Portuguese neutrality of Macau up to a certain point. As a result, Macau enjoyed a brief economic age of prosperity as the only neutral trading port in South China. This began after the Japanese occupied Guangzhou and Hong Kong. In August 1943, the Japanese seized the British ship “Sian” in Macau and killed roughly 20 guards on the ship. Within a month, the Japanese demanded the installation of “advisors” as an alternative to military occupation of Macau. The result was a Japanese protectorate created over Macau. When Japan lost the war in August 1945, their reign over the region came to an end.
When plans to sell aviation fuel to Japan came to the attention of the USA, aircraft from the USS Enterprise bombed and strafed the hangar of the Naval Aviation Center to destroy the fuel. American air raids on targets in Macau were carried out in February and June of 1945 during the Japanese protectorate of Macau. After protests by the Portuguese government in , the USA paid $20,255,952 to the government of Portugal for the bombings in Macau.
Communist China’s Impact on Macau
After World War II when the Chinese Communists came to power in 1949, they declared the Protocol of Lisbon invalid. This is the Protocol that had kept Macau free as a Portuguese territory. It was seen as an unequal treaty imposed by foreigners on the Chinese. However, China was not yet ready to settle the treaty, leaving the maintenance of this treaty for a more appropriate time. China took a similar stance in regard to Hong Kong, leaving both territories under the rule of Portugal and the UK respectively.
In 1951, the Salazar regime of Portugal declared Macau an other Portuguese colonies to be “Overseas Provinces” of Portugal.
During the 50s and 60s Macau’s border crossing over to China (Porta do Cerco) was referred to as the “Far Eastern Checkpoint Charlie”. A major border incident occurred in 1952 between Portuguese African Troops and the Communist Chinese Border Guards. Reports of the incident stated an exchange of fire between both parties lasting an hour and 45 minutes leaving one dead and several dozen injured on the Macanese side, and more than 100 casualties claimed by the Communist Chinese side.
Macau’s Gambling Industry Begins
The Macau Grand Prix was established in 1954, first as a treasure hunt throughout the city and in later years as a formal racing event. The Macau Grand prix now occurs annually and includes several races of formula-1 cars and other vehicles. A Museum was erected in it’s honor on the 50th anniversary of the event known as the Macau Grand Prix Museum.
In 1962, a major breakthrough for the gambling industry occurred. The government granted the Sociedade de Turismo e Diversoes de Macau, also known as the STDM. This was a syndicate jointly formed by Macanese and Hong Kong businessmen, giving monopoly rights to all forms of gambling. The STDM allowed for western-style games and modernized the marine transportation between Macau and Hong Kong, bringing millions of gamblers from Hong Kong every year.
The 12-3 Incident
In 1966, riots broke out during the communist Cultural Revolution, when local Chinese in Macau and the authority of Macau clashed. The most serious of the incidents is referred to as the 12-3 incident and was sparked by the overreaction of some Portuguese officials to what was a typical dispute about building permits. This riot resulted in 8 deaths and the a major climbdown by the Portuguese Government over the region.
On January 29th, 1967, the Governor of Portugal José Manuel de Sousa e Faro Nobre de Carvalho, signed an apology statement at the Chinese Chamber of Commerce, under a portrait of Mao Zedong, with Ho Yin, the Chamber’s President, presiding.
Two major political agreements were signed, one with Macau’s Chinese Community and one with mainland China. The second of these agreements committed the Government to compensate local Chinese leaders of the community with up to 2 million Macau Patacas and to prohibit all KMT activity in Macau. This move ended the conflict and the relationship between the government and leftist organizations in Macau remained peaceful henceforth.
The assumed success in Macau encouraged leftists in Hong Kong to riot as well. This lead to riots by leftist groups in Hong Kong in 1967. A Portuguese proposal to return the province to China was declined by the Chinese at this time.
On 20 December 1999, full sovereignty over Macau was returned to China. During the centuries of administration by Portugal, Macau was heavily influenced by Portuguese and European culture and architecture. This influence has had a lasting impact on the cultures of the region to this day. The impact of Portuguese, European and Chinese cultures have given rise to Macanese Culture. This consists of the unique regional customs, cuisine, and architecture that visitors and locals have come to know and love today. Macau truly acted as a bridge between Asian and European Cultures (hence the meaning of its name).
The “Joint Declaration on the Question of Macau” and “Macau Basic Law” maintain that Macau must operate with a high degree of autonomy until at least 2049. Because of the unique laws administered in the region Macau is allowed the presence of gambling resulting in an unrivaled tourism industry. As a result, Macau is known by many as the “Gambling Capital of The World” and for good reason. It is the biggest gambling and casino filled region in the world, and home to several of the largest and most extravagant casinos and resorts ever built as a result.
The Rise of Macau as the Gambling Capital of the World
In 2002, the Macanese government ended the monopoly system created with the STDM in 1962. This prompted 3 casino operating concessions and later 6 sub-concessions to be opened under the Sociedade de Jogos de Macau or SJM (an 80% owned subsidiary of STDM): Wynn Resorts, Las Vegas Sands, Galaxy Entertainment Group, MGM Mirage and Pansy Ho Chiu-king, and the partnership of Melco and PBL, This marked the beginning of the rise of Macau as the new Capital of Gambling in Asia.
One of the measures to develop the gambling industry was the creation of the Cotai Strip. It was completed after the handover to China with construction of the hotels and casinos beginning in 2004. By 2007, the first of many resorts opens on the Strip, The Venetian Macao – the World’s largest casino. Many other resorts followed both on the Cotai Strip and on the Amizade Strip. This provided a major tax income stream to the Macau government and a drop in overall unemployment over the years down to just 2% by 2013.
The 2008 Financial Crisis hits Macau
Similar to other economies of the world, the financial crisis of 2007 to 2008 hit Macau cause a stall in the construction of several major casino operations. Sands Cotai Central was one casino to halt its construction but it finally did resume construction. A spike in unemployment was another result of the crisis.
Modern Macau’s Success
Macau is one of the world’s richest cities due to its major tourism and a massive casino gaming industry. As of 2013 its GDP per capita by purchasing power parity was ranked highest in the entire world. By 2006 Macau was known internationally for having the largest gambling industry in the world. As a result, Macau came to be known as an even bigger and brighter Las Vegas. According to many big names in the industry, Las Vegas is the Macau of America! It comes as no surprise that it’s economy has exploded as a result of its administrative freedom. Recent Asian and international tourism is behind this massive boom to the regions economy, placing it among the most highly acclaimed tourist destinations on Earth.
The Slow-down of the Casino industry in 2014
2014 was the first time in years that the gambling revenues in Macau had declined on an annual basis. Starting in June 2014, revenues declined on a monthly basis. Hence, the Macau Daily Times announced that the “Decade of gambling expansion had come to an end”. This lead to the Macau government attempting to reconstruct the economy, depending less on gambling revenues. Some reasons for the slowdown are due to China’s anti-corruption movement reaching Macau, and China’s economy also slowing down.
It is hopeful that the new casinos to open by the end of this year and in 2017, will see new growth to the casino industry as the VIP market has seen major decline in the past few years.
Gambling Events Timeline:
- 1844 Portuguese legalized gambling in Macau
- 1937 Tai Heng Company granted monopoly
- 1954 Macau Grand Prix established
- 1962 STDM (Sociedade de Turism e Diversoes de Macau) brings in all forms of gambling
- 1970 Lisboa Opens
- 1995 Macau International Airport opens
- 1999 Portugual transfers control of Macau back to China
- 1999 Macau becomes a SAR and gambling laws remain unchanged
- 2002 Macau ends monopoly system grants 6 licenses to SJM, Wynn, Las Vegas Sands, Galaxy
- 2003 Pharoah’s Palace Opens at the Landmark Hotel
- 2003 Galaxy’s Waldo Casino opens
- 2004 Sands Macao opens, ushering in a new era
- 2005 Grandview Casino opens up across from the Macau Jockey Club
- 2005 Golden Dragon Hotel & Casino opens
- 2005 Hotel Taipa Square Casino opens in Taipa
- 2006 Wynn Macau opens Sept 6th
- 2006 Galaxy opens three properties: Starworld, Rio and President Casino
- 2006 Babylon Casino opens on Fishermans Wharf
- 2006 Macau surpasses Las Vegas in terms of annual gaming revenue
- 2007 Venetian Macao (in Cotai) Opens
- 2007 Melco Crown open’s its first Macau property, Crown Hotel in Taipa
- 2007 Grand Lisboa opens in Macau
- 2007 MGM Opens at ‘the One Central’ mall in Macau
- 2008 Sofitel and Ponte 16 casino open in the Inner Harbor distict
- 2009 SJM Opens L’Arc Casino on Sept. 20th
- 2009 City of Dreams Resort & Casino opens in Cotai
- 2009 Casino Oceanus (Macau’s only stand-alone casino)
- 2010 Wynn Encore Macau Opens in April
- 2011 Galaxy Macau opens in Cotai