Sam Hou Fai, the former president of Macau’s Court of Final Appeal and a long-time advocate for economic diversification, has been elected as the new Chief Executive of Macau. His election comes at a pivotal moment for the city, known as the world’s largest casino market. Sam’s warnings about the outsized influence of the gambling industry have raised important questions about the future direction of Macau’s economy.
Sam, 62, was the sole candidate in the election and was overwhelmingly supported by a 400-member selection committee, receiving 394 out of 398 votes cast on Sunday, with the remaining four being blank. His ascension to leadership is poised to reshape Macau’s economic and political landscape, especially as the former judge has been vocal about the risks associated with the city’s reliance on the gaming industry.
The election of Sam Hou Fai was highly anticipated given his background as a legal expert and his recent critiques of Macau’s heavy dependence on its gambling sector. As the only candidate running for the position, his election was largely seen as a formality, but the implications of his leadership are significant. He replaces the outgoing chief executive, Ho Iat Seng, who opted not to seek another term, citing health reasons.
Sam’s elevation to Macau’s highest office marks the first time that the city will be led by someone born outside its borders. A native of Guangdong, a neighboring province in mainland China, Sam moved to Macau during the 1980s when the city was still under Portuguese administration. His educational background, which includes studying at both Peking University and the University of Coimbra in Portugal, has given him a unique perspective on Macau’s legal and economic frameworks.
Sam Hou Fai’s career in law has been long and distinguished. He became a judge in Macau in 1997, shortly before the city was handed back to China from Portuguese control. He later rose to become the president of the Court of Final Appeal, the highest judicial authority in the region. His legal expertise, combined with his experience navigating both Chinese and Portuguese legal systems, has earned him a reputation as a skilled and thoughtful leader.
However, Sam is not merely focused on legal matters. His views on the city’s economic development, particularly its dependency on gambling, have set him apart from previous leaders. In August, just a few months before the election, Sam made headlines by warning against the dominant role that casinos play in Macau’s economy. “For a period of time, the tourism and gaming industry developed in a disorderly manner and expanded wildly,” he said, in a statement that reverberated throughout the city and among stakeholders in the global gambling industry.
Sam’s remarks underscored his belief that Macau’s long-term prosperity depends on diversification. “Having one industry dominate the city is not beneficial for Macau’s long-term development,” he argued, stressing that the unchecked growth of casinos has led to a strain on local resources, including manpower, and has even limited career opportunities for the city’s youth. This candid assessment signals that Sam may usher in an era of economic restructuring for Macau, pushing the city toward a more sustainable and diversified economy.
Macau’s status as the world’s largest casino market is undisputed. The city overtook Las Vegas in terms of gambling revenue years ago, and for a long time, its VIP gaming rooms—designed to attract wealthy high rollers—were the crown jewel of the industry. However, the city’s over-reliance on gambling has long been seen as a vulnerability, especially when broader economic conditions fluctuate or when political pressures from Beijing rise.
Over the past several years, there have been cracks in the city’s once-booming casino industry. Macau’s government, under pressure from Beijing, has implemented stricter regulations on the junket operators who brought in wealthy gamblers, often from mainland China. These junkets not only arranged for high rollers to visit Macau but also provided them with credit, sometimes operating in legal gray areas that allowed large sums of money to flow out of mainland China—something Beijing has been keen to curb.
Macau’s response has been to imprison some of the top junket operators and tighten regulations on their activities, leading to a dramatic collapse in VIP gambling. At its peak, VIP gaming contributed half of Macau’s total casino revenue, but with these changes, the sector has been significantly weakened. Meanwhile, mass-market gambling, which attracts middle-class tourists, has grown, but it has not been enough to offset the decline in the VIP segment.
Sam Hou Fai’s election comes at a critical juncture, as Macau seeks to rebalance its economy. His public stance on economic diversification suggests that he may push for a reduction in the city’s dependence on casinos. Whether he can succeed in this effort remains to be seen, especially as the gambling industry continues to be a dominant force in Macau’s economy. Nonetheless, Sam has already made clear that the status quo is unsustainable.
Sam’s comments about the need to diversify Macau’s economy came as Beijing launched another phase of its ongoing crackdown on illicit financial activities, particularly targeting money laundering and capital outflows. This latest crackdown has focused on Macau’s money-exchanging practices, which have long been a key part of the city’s gambling economy.
China’s central government has become increasingly concerned about the use of Macau as a conduit for moving money out of the mainland, particularly as the country grapples with its own economic challenges. As a Special Administrative Region of China, Macau is subject to Beijing’s oversight, even though it enjoys a high degree of autonomy in its governance and legal system. The Chinese government’s desire to tighten controls on capital flight has made it increasingly difficult for Macau’s casinos to operate in the way they once did.
This context provides important background to Sam Hou Fai’s election. His stance on economic diversification aligns with Beijing’s broader goals of reducing financial risks associated with gambling and capital outflows. As a result, Sam is likely to have strong backing from Chinese authorities as he embarks on efforts to recalibrate Macau’s economy.
The biggest question looming over Sam Hou Fai’s leadership is how he plans to diversify Macau’s economy. While his critiques of the gambling industry have been well-publicized, turning those critiques into actionable policy will be a challenge.
One potential avenue for economic growth is the further development of Macau’s tourism and entertainment sectors, beyond gambling. Macau is already a major destination for tourists from mainland China and other parts of Asia, but most visitors come for the casinos. Developing other attractions, such as cultural sites, entertainment events, and family-friendly experiences, could help broaden the city’s appeal.
Sam Hou Fai has also hinted at expanding Macau’s role as a financial hub, though this is likely to be a long-term project. Macau’s proximity to Hong Kong, another Special Administrative Region known for its robust financial sector, could present opportunities for collaboration, particularly as Hong Kong faces its own political and economic challenges. If Macau can position itself as a more diversified economy with a strong financial sector, it could attract new investments and reduce its reliance on gambling.
Additionally, technology and innovation could play a role in Macau’s future. While the city has not traditionally been a center for tech industries, there is potential for growth in areas such as digital finance, fintech, and smart city technologies. If Macau can create a more supportive environment for startups and innovation, it may be able to carve out a niche in these emerging sectors.
While Sam Hou Fai’s election brings hope for economic reform, he will face significant challenges in implementing his vision. The gambling industry has long been a powerful force in Macau, with deep connections to the local economy and employment. Any attempts to reduce its influence will likely be met with resistance, not just from casino operators but also from workers who depend on the industry for their livelihoods.
Moreover, Macau’s broader economy is intertwined with the fortunes of mainland China. As Beijing continues to exert more control over the region, Sam will need to navigate complex political dynamics while still maintaining Macau’s economic autonomy. The ongoing crackdown on money laundering and capital outflows is just one example of how closely Macau’s fate is tied to decisions made in Beijing.