The VIP-Room Contractual System and Macao’s Traditional Casino Industry

This study provides a systematic analysis of the VIP-room contractual system of Macao’s traditional casino industry. It examines the system’s historical background, its organisational structure, and its operational mechanisms. The evolving and likely future changes in the VIP sector — as well as the mass market sector — caused by the liberalisation of Macao’s gaming laws in 2001 are examined. The dynamics of the allocation of business between the VIP sector and mass market sector are examined in the context of underlying economic and cultural forces. A major conclusion of this analysis is that the VIP-room contractual system that evolved in Macao’s casino industry from the 1980s until the current decade is already undergoing significant change in the new legal and competitive environment. There are already signs that it is being replaced by new systems consistent with competitive realities. However, Macao’s VIP business will likely continue as an important component of the market in one form or another.