China is drafting a proposal that will allow gambling on Hainan Island. If approved, this unprecedented move by the Chinese government will likely reshape the gaming territories in China and strip Macau of its status as the only territory in China where gambling is legal.
Discussions are not public yet, but the government's proposal is actually part of a wider plan that could help transform the economy of a strategic southern province. The proposal is still at its infancy but has the capacity to open the door to physical casinos in the long term. China at the moment, bans gambling and casinos in the mainland.
Hainan is roughly the size of Switzerland and is often referred to as China's Hawaii for its beautiful beaches. The island also strategically serves as a jumping point for the Chinese Navy and Air Force that patrols the South China Sea.
Although there are currently three operation airport on the island, most of them are on the eastern portion. One part of the gaming-focused proposal will be to build a new airport in Western Hainan and to relax visa rules. This will likely help attract more people to the island. Currently, the province is struggling with fiscal deficits and contends with debt woes.
The Hainan plan will definitely create a shift in China's view towards gambling and is going to directly affect Macau's $33 billion casino industry. Lately, Macau has been shifting to attracting Chinese tourists and families to the territory, the same Market that the Island currently draws.
Macau is currently the world's largest gaming hub with annual gross gambling revenues that is five times bigger than that of Las Vegas. While the gambling proposal is meant to rescue Hainan's economy, the impact it will create on Macau's economy will be unfathomable. Even if it is too early to predict the exact impact to Macau, should gambling be legalized on the Hainan Island, analysts are certain that the city will be affected negatively.