The gambling industry in Macao has a history of 150 years. As early as 1847, a decree was enacted for franchised gambling industry in Macao. In 1937 the franchised system for gambling was introduced. In 1961 the then Government publicly sought the franchised right to gambling and in 1962 the Macao Society of Tourism and Entertainment (STDM) obtained the franchised right and has since operated this business up till now. In 1997 the STDM signed a revised contract with the Government for the franchised right for the gambling industry, extending the contract to 2001.

The gambling industry plays a principal role in the tourist and gambling industry of Macao. In recent years, the gambling industry contribution to the GDP of Macao has been as high as 25%, and over two thirds of the earnings from the entire tourist industry have come from the gambling industry. Starting from January 1996, the tax rate of the gambling industry has increased from 30% to 31.8%. The revenue from the taxes of this industry takes up 40% of the government fiscal revenue. Apart from the tax contribution, this industry has also brought direct benefits to the Government in other ways, such as providing jobs to over 10,000 people and financing in part the public projects, social charity and cultural undertakings. It has in addition benefited many other industries to a certain extent, such as the hotel industry, the catering business, transportation, banking and the construction industry. For instance, most income of the marine transportation between Hong Kong and Macao is derived from the gambling industry.

In the first six months of 2004, gaming revenue had recorded a total of MOP19.7 billion (USD2.53 billion), which is equivalent to 74% of the USD3.4 billion gaming revenue of Las Vegas. It generated MOP6.7 billion (USD0.86 billion) in direct tax for the MSAR.

After taking into consideration the report submitted by the Casino Concessions Committee, particularly its conclusions and suggestions, the Chief Executive issued an Executive Order granting provisional casino concessions to Sociedade de Jogos de Macau (a subsidiary of the STDM), Wynn Resorts (Macau) and Galaxy Casino Company.

The MSAR Government signed the Concession Agreements on Operating Games of Luck and Other Games in Casinos in the Macao Special Administrative Region with Sociedade de Jogos de Macau in March, and with Wynn Resorts (Macau) and Galaxy Casino Company in June.

As of October 2004, Sociedade de Jogos de Macau was operating 13 casinos in the territory, nine in peninsular Macao and four on Taipa Island. According to Gaming Inspection and Coordination Bureau, there are a total of 48 VIP rooms in all the casinos. Two more casinos, operated by Galaxy Casino S.A. and the Venetian Macao respectively, opened in the first half of 2004.