Gambling has been legal in Macau since 1851. For many years the government granted a monopoly of gambling to a single operator. In 1962 STDM was granted the monopoly, and managed to hold onto it until the end of 2001, when the monopoly system ended and a number of US companies started to operate in the region, some in joint ventures with local partners.

The increase in investment that has followed the ending of the monopoly system has turbocharged the Macau economy, which has become the fastest-growing economy on the planet. As you can see from the chart above, GDP per capita has now overtaken that of Hong Kong and is enormously higher than the mainland average. This has produced a dramatic increase in property prices, which rose by a 240% between 2004 and 2007.  

Macau has low property (and other) taxes, is very attractive to people who want to take up residence in the country, and is still cheap compared to Hong Kong. Casino building paused in 2008 but, but is now picking up again. The legal system could not be more encouraging of property ownership and finance is readily available, even to non-resident foreigners. The Delta Bridge is likely to have a major impact on the local economy.

Gaming is hugely important to the economy, and the 40% tax levied on the casino operators' revenues gives the Macau government plenty of money to build up the island's infrastructure. This permits it to have a low, flat rate of personal income tax and no capital gains or other property-related taxes.

Macau is on track to have 10,000 hotel rooms in the next few years. With an international airport, and close proximity to airports in Hong Kong, Shenzhen and Zhuhai it is set to become the 'MICE' (meetings, incentives, conferences and exhibitions') centre of Asia, although it is likely that gaming will continue to be extremely important to Macau for decades to come.