The rise and fall of Macau’s pawnshops
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Macau’s pawnshop industry, once a thriving pillar of the city’s casino economy, has seen its fortunes plummet from over 200 establishments at its 2014 peak to just 56 today. A fourth-generation pawnbroker charts the sector’s dramatic rise and fall — and warns of further decline ahead.
By Jing Wu (text) and Gonçalo Lobo Pinheiro (photos), Lusa
Alexander Wai Kai Leong, 39, the fourth-generation owner of Veng Seng Pawnshop, is a man whose story is told in gold and jade — and his first impression is striking, thanks to the jewellery he wears.
A gleaming gold watch and a gold ring set with a vivid green jade stone immediately draw the eye to his left hand. His right hand is equally adorned: a golden dragon ring coils around his index finger, and a large ruby sparkles on his ring finger. A string of wooden prayer beads wraps his right wrist, completing the ensemble.
Leong’s family legacy began in 1940, when they owned eight pawnshops in Hong Kong.
At the time, during the Second Sino-Japanese War, pawnshops boomed, fuelled by refugees fleeing to Hong Kong and Macau in dire straits. “People pawned shoes, duvets and clothing in my grandfather’s time,” Leong told Lusa.
After 70 years in the gamblers’ enclave, the shop relocated to a neighbourhood populated by migrant workers. The move shifted Leong’s core clientele to workers from Southeast Asia, which meant “significantly lower profits”.
“One gambler is equivalent to 30 or 50 local or migrant workers,” he estimated, noting that such workers often pawn jewellery to obtain liquidity after remitting most of their wages back home.
Even so, Leong does not regret the move. “It is a good thing we moved. If we had not, it would have been terrible,” said the businessman, who also chairs the supervisory board of the Macau Pawnshop Merchants Association.
From boom to bust
The Leong family has witnessed the full cycle of expansion and contraction in Macau’s pawn industry, a sector intrinsically tied to the casino business.
Right after gaming liberalisation in 2003, the number of pawnshops in Macau “increased dramatically” compared with the period before the territory’s handover to China in December 1999, Alexander said. “Until then, Macau had no more than 40 or 50 such establishments.”
“At the peak, around 2014, there were more than 200 pawnshops,” he noted. That number has since fallen sharply — today there are just 56, a level not seen since before 1999 — and the decline has yet to bottom out amid fresh challenges.
The downturn began in 2019. “The mass protests in Hong Kong affected our industry in Macau. Mainland Chinese tourists were afraid to travel to Hong Kong and, as Macau is next door, they did not come here either,” the pawnbroker explained.
“Then, when the pandemic hit, business collapsed,” he continued. After border closures, many pawnshops that previously operated round the clock switched to daytime hours only. “This forced the closure of countless shops,” he added.
The latest headwind comes with the shutdown of satellite casinos by year-end, and the sector’s crisis “will deepen further”, Leong warned.
At least nine satellite casinos are expected to cease operations by 31 December, when the three-year grace period expires for agreements between venue operators and the concessionaires under which they operated.
From then on, it will be survival of the fittest; only the strongest businesses will endure, with no prospect of external support beyond what is inherent to the trade itself.
‘Marginalised’ but vital
Leong also feels the sector has been “marginalised by the authorities, who consider pawn-broking a high-risk business for money laundering”.
Yet, he argues, while Macau’s gaming industry is considered core, “pawnshops have long served a mutually beneficial purpose — for themselves and for those in power”.
Pawnshops are a vital part of the ecosystem, the association leader said pointedly: “They not only generate tax revenue for the government and add to the city that never sleeps, but also provide additional employment opportunities for Macau residents.”~
https://www.macaubusiness.com/the-rise-and-fall-of-macaus-pawnshops/
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