Macau’s sweeping gaming reforms between 2022 and 2024 marked a fundamental shift in the industry’s development model. The changes align the sector more closely with China’s national strategy and shift its focus from revenue generation to governance, according to a new study by the University of Macau.
The research, conducted by João Ilhão Moreira – an associate professor at the Faculty of Law, University of Macau, and Zhou Yudi – a PhD student he supervises, argues that the dismantling of the long-dominant junket system reflects broader policy priorities in mainland China, including tighter capital controls, enhanced financial transparency and a stronger emphasis on law-based governance.
‘The curtailing of junkets reflects strategic alignment with mainland China’s objectives,’ the researchers wrote, noting that the reforms aim to reconcile Macau’s gaming practices with evolving national economic and legal frameworks.
End of junkets drives industry shift
At the center of the reforms is the effective dismantling of Macau’s junket system, which previously accounted for more than 70 percent of gross gaming revenue through VIP play.
Historically, junkets served as key intermediaries, facilitating high-stakes gambling by mainland Chinese patrons through credit provision, currency exchange and cross-border fund settlement. However, the study highlights that this model increasingly conflicted with China’s anti-money laundering efforts and capital control policies.
‘The junket model, while integral to Macau’s growth, increasingly conflicted with China’s anti-money-laundering enforcement and sectoral modernization,’ the study highlights.
The crackdown on junkets accelerated following high-profile legal cases, including the conviction of former Suncity Group CEO Alvin Chau, which signaled a decisive regulatory shift. Authorities in both Macau and mainland China moved to curb illicit practices such as side-betting, underground banking and unregulated capital flows tied to VIP gaming.
According to the study, junkets had evolved into ‘quasi shadow-banking intermediaries,’ providing financial services outside formal regulatory oversight, thereby posing systemic risks to financial integrity and governance.
Shift toward compliance and mass market
In response, Macau’s revised Gaming Law introduced a stricter regulatory framework, significantly reducing the role of junkets and imposing tighter controls on industry participants.
Key measures included restricting junkets to a single concessionaire, prohibiting them from offering credit, and enhancing licensing requirements for both promoters and collaborators.
These changes have accelerated a structural shift away from VIP-driven revenue toward a more diversified, mass-market-focused model.
‘Casinos shifted their focus to the mass market, targeting a broader demographic of casual gamblers seeking entertainment rather than high-stakes gambling,’ the researchers noted.
The study adds that the new model emphasizes compliance, transparency and standardized financial controls, aligning with China’s broader push for anti-corruption enforcement and financial supervision.
Integration with national development priorities
More broadly, the reforms indicate Macau’s deeper integration into China’s political and economic framework, particularly under the concept of ‘Chinese-style modernization.’
The study situates the gaming reforms within a wider policy environment shaped by China’s emphasis on ‘common prosperity’, capital regulation and risk control. In this context, the gaming sector—once heavily reliant on opaque capital flows and high-roller play—has been repositioned to support national governance objectives.
‘Regulation of Macau’s casinos […] became a focal point for legal reforms‘, the researchers wrote, highlighting the need to curb unregulated intermediaries and strengthen oversight.
The transition also reflects a broader recalibration of Macau’s economic role, from a high-risk gaming hub to a more regulated international tourism and leisure destination.
From revenue-driven growth to governance-led development
The study concludes that Macau’s gaming transformation represents a shift in policy priorities, where governance, compliance and long-term sustainability take precedence over short-term revenue maximization.
While the junket-driven VIP model once fueled rapid growth, it also introduced financial, legal and reputational risks that became increasingly incompatible with China’s regulatory direction.
“The analysis demonstrates how subnational legal reform mediates between SAR’s gaming practices, China’s national strategic priorities, and evolving legal frameworks.”
As a result, Macau’s gaming industry has entered a new phase characterized by steadier growth, greater regulatory oversight and closer alignment with national policy goals.
