GAMBLING has a profound impact in a city. A few years ago, while doing volunteer work with Filipino migrant workers (OFWs) in Macau, I observed the exuberance of its gambling economy at its apex and its sudden collapse when Xi Jinping banned Chinese mainlanders from gambling in Macau.
On the economic impact, Macau’s gambling revenue in the operation of its casinos reached up to 70 to 80 percent of the total government revenue at its peak; which accounts to over 60 percent of Macau’s growth domestic product (GDP). With the rise of China in the economic stage, Macau overtook Las Vegas to become the gambling capital of the world.
However, gambling also attracted unsavory characters that brought with them underground criminals and corrupt politicians who used the casinos as laundering machines. In time, Xi Jinping cracked down and banned mainland Chinese from gambling in Macau as corrupt Chinese officials had been observed to use the Macau casinos to launder their loot in cahoots with some locals.
The adverse economic consequences of the ban were brutal. On the real estate impact, vacancy rate of hotels and apartments rose to almost 80 percent. Unemployment rose to unprecedented heights as tourist arrivals, mostly from the mainland, dropped drastically. While Macau was able to bounce back from an almost certain economic collapse, this painful experience created a lasting impact on its leaders and taught them the need to diversify the sources of revenues for the city. Casino revenues were good while they last. And it did not last.
Thereupon, the Macau leadership has consciously and deliberately shifted from gaming revenues to non-gaming revenues as the economic driver of the island.
As a witness to this sudden peak and collapse of an economy dependent on gambling, I resisted the urge to bring more casinos and online gambling into the BCDA ecozones, particularly in Clark. When an ambassador of a particular country invited me to dinner to share and to seek help in ensuring the safety of their citizens from falling prey to the organized criminal operations of his own countrymen, I was further convinced that illegal gambling could cause more harm than good in building a nation. There were many casino applications, including applications for online gambling which we denied in Clark.
While the revenues were tempting, the social inimical effects were revolting. Casinos and related businesses can generate significant revenue through taxes, licensing fees, and tourism. Cities like Las Vegas and Macau have built entire economies around gambling, attracting millions of visitors each year. This influx of tourists supports hotels, restaurants, retail shops and entertainment venues, creating jobs and boosting local income.
However, there is a dark side to this. For a time, Clark and its surrounding environs were included in the list of hot spots for human trafficking and child sexual exploitation and abuse. Law enforcement agencies busted some organized criminals who were engaged in child online pornography. Gambling does not only attract legitimate tourists. It also attracts criminals to victimize the very same tourists playing in these casinos. These criminals always include money launderers all over the place who are wanted by their own respective governments to answer for their crimes.
There is also the risk of economic dependence. If a city relies too heavily on gambling, it becomes vulnerable to market fluctuations, changing tourism patterns, or regulatory shifts. And that was exactly what happened to Macau.
Gambling industries create employment opportunities, ranging from casino staff and security personnel to hospitality and entertainment workers. This can reduce unemployment and stimulate local business activity. Small enterprises, such as taxi services and souvenir shops, often benefit from increased foot traffic. However, jobs in the gambling sector can sometimes be unstable or low-paying, especially in service roles. Additionally, a strong focus on gambling may crowd out other industries, limiting economic diversification and leaving the city less resilient in the long run.
While gambling can be a form of entertainment, it also carries social risks. One of the most serious problems is gambling or addiction. Individuals who develop gambling problems may face financial difficulties, mental health issues, and strained relationships. This can lead to wider social problems, including increased demand for social services, counseling and healthcare. Communities with high levels of gambling activity may also experience rising debt levels, family instability, and in some cases, crime related to financial desperation. These social costs can offset some of the economic gains, especially if there are insufficient support systems in place.
In the Philippines, I remember warning my friends in the real estate industry to take caution in the exuberance and price spikes caused by POGO (Philippine offshore gaming operations) from mainland China. It felt like the 1990s exuberance that led to the Asian financial crisis. Many did not listen for fear of missing out the opportunities that their competitors were reaping meteoric profits then. Thus, when President Marcos banned the POGO operations, we now see the high vacancy rates in condo products. Just recently, aggravated by the Iran war which sent construction prices soaring, the real estate industry is experiencing oversupply. Some well-known developers halted their projects as others are confronted by oversupply of inventories that the market could not absorb. The flood control scandal focused the spotlights again on the negative effects of these casinos in the governance of the country. Trillions of stolen public funds were washed by corrupt DPWH officials in casinos.
Gambling can significantly impact a city in both positive and negative ways. It can drive economic growth, create jobs and enhance infrastructure, but it also brings risks such as social inequality, addiction and potential crime. The overall effect depends largely on how the industry is regulated and integrated into the broader urban economy. Cities that strike a balance — leveraging economic benefits while addressing social costs — are more likely to experience sustainable development and improved quality of life for their residents.
In the long run, building schools are far better than having casinos. Our government must set its priorities right. Education empowers our people. Gambling destroys the moral fiber of our society preventing our people from gaining the dignity and the skills to be truly economically free.
