A mainland administrator is defending the development of the gaming industry in Macao during China's ongoing annual legislative session.

Li Gang, director of the Liaison Office of the central government in Macao.[Photo courtesy Macao Evening]

"Macao should not seek a diversified economy at the expense of the gaming industry," said Li Gang, director of the Liaison Office of the central government in Macao, while attending a group discussion at the third plenary session of the 12th National People's Congress on March 5 in Beijing.

Macao is the only Chinese territory where gambling is allowed. The Macao Special Administrative Region generated more than US$450 billion in gambling revenue in 2013, about seven times the gambling revenue of Las Vegas.

The city, however, has witnessed a sharp decline in its pillar industry since June 2014. The revenue of the gaming industry decreased by 2.6 percent throughout 2014, the first decline since the city liberalized the industry in 2002. According to Li, revenue growth in the industry decreased by 17.4 percent this January and by 48.6 percent in February relative to the same periods last year.

The central government has encouraged the SAR to pursue "appropriately diversified and sustainable economic development," but Li said it may take 20 to 30 years or even longer for the city to build such an economy. There is no point in being overly worried by the transformation, he added.

Li Gang attributed the decline in the gambling industry to the slowdown in China's economic growth, which has discouraged mainland business owners from frequenting the casinos, especially their VIP halls. New and tighter regulations on passports, bank cards and customs inspection have contributed to the decline. The shock to the city's opaque casino junket system caused and evidenced by the disappearance of a middle man named Huang Shan, who vanished along with a colossal US$13 billion last April, was also to blame.

Li admitted that the sweeping anti-corruption campaign on the Chinese mainland had also contributed to the industry's sluggish performance, but he believed it was "not the major reason."

Li nonetheless said that the slowdown's pressure on the gambling industry has provided the city with an opportunity to transform its economic structure and pursue diversified development In the future.