When Portugal returned its colony Macao to China in 1999, coffee shop owner Daniel Chao was a first grader living in a different world.

Since then his sleepy hometown has transformed into a bustling gaming hub lined with glittering casinos. Its once quiet streets are now jammed with tourist buses. But the growing wealth of the city dubbed the “Las Vegas of the East” has not brought qualities of sustainable development such as economic diversity and high civic participation.

“What was once a relaxed, free place in my childhood has become a place that is crowded and highly commercialized,” said Chao.

Macao will mark the 25th anniversary of its return to Chinese rule on Friday. Chinese President Xi Jinping is visiting the city for three days and the city is festooned with celebratory banners and other decorations. A fireworks display is planned for next week.

Since 1999, the city of 687,000 has transformed from a monopoly-driven gambling enclave into the world’s biggest gaming hub, packed with mainland Chinese tourists. Its GDP per person has more than quadrupled to $68,000, roughly on a par with Denmark and Australia and surpassing Hong Kong's of about $50,000.

China rules Macao under a “one country, two systems” arrangement similar to its governance of Hong Kong, a former British colony. Macao is the only Chinese city where casino gambling is legal and it has resorts run by affiliates of the American gaming giants MGM Resorts, Las Vegas Sands and Wynn Resorts.

Since Macao opened its casino market following the handover to Beijing, its economy has grown to $46 billion in 2023 from $6.5 billion in 1999, despite economic slumps during the COVID-19 pandemic and a crackdown on the junkets that have facilitated visits by high-roller gamblers from elsewhere.

The economic growth has come at a cost

Chao’s mother worked at a casino job that brought better pay and a bigger apartment, but also stress and irregular hours. He remembers doing homework at 5 a.m., after her night shift. When he was working as a teacher, his students often went to sleep late or had to rely on paid tutors because their parents also worked casino shifts.

The city’s tourism boom has brought years of easy money that gave its businesses scant incentive to strive to improve their products or services and develop the resilience needed to overcome the hard times of the pandemic and competition from mainland Chinese products, Chao and some other residents said.

Chao has considered leaving the city, but opted to stay.