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Gambling hub Macau has rolled the dice on a Beijing-backed former top judge as its new leader, in a move that analysts said could intensify Chinese authorities’ push for the former Portuguese colony to diversify its economy away from the gaming sector.

Beijing- and Portugal-educated Sam Hou Fai will take office in December after being elected unopposed on Sunday, with 394 votes from a 400-member selection committee mostly comprising pro-Beijing politicians and businesspeople and representing less than 1 per cent of Macau’s population.

Outgoing Macau chief executive Ho Iat Seng had announced in August that he would not seek a second term, citing “health reasons”.

Sam, 62, was president of Macau’s top court for more than two decades and was seen as Beijing’s preferred choice. The Beijing representative office that oversees Hong Kong and Macau on Sunday lauded Sam as a “patriot”.

He has previously warned against the “wild” expansion of the gambling sector, which is set to come under further pressure from Beijing.

“[Sam] has a clear understanding of what China wants from Macau,” said Ben Lee, an Asian gaming expert and managing partner at IGamiX Management and Consulting.

Sam is the first leader in Macau’s postcolonial history without the strong business background or ties of his predecessors. The ex-judge’s “apparent lack of connection to the traditional families that have ruled Macau” represents a “huge advantage and [is] critical to China wanting diversification” of the territory’s economy, Lee added.

Macau was hit hard by the pandemic. China’s stringent travel controls choked off the city’s main source of visitors and gamblers. That followed Beijing’s sweeping crackdown on the gambling sector in 2021, in part to curb capital flight through the territory, the only place in China where gambling is legal.

The crackdown, and the promise of greater regulatory oversight, was a big blow to Macau’s six major casino operators, which include the US-owned Sands, MGM and Wynn.

As part of the campaign, authorities homed in on junkets, promoters that casinos rely on to attract high-spending mainland VIPs. They arrested the heads of two of the city’s largest junket operators, accusing them of money laundering and illegal gambling.

While mass gross gaming revenue has since recovered to 130 to 140 per cent of pre-pandemic levels as of this month, the critical VIP segment has only recovered to about 30 to 35 per cent of that level, according to JPMorgan analysts.

Overall gross gaming revenue is expected to reach only about 80 per cent of 2019 levels for 2024, the bank estimated.

China has increasingly steered Macau to emulate Las Vegas’s success in diversifying its economy by wooing international events. Macau’s major casino operators — as a condition of their gaming licence renewals last year — pledged to put an overwhelming majority of their combined $15bn investments over the next decade in non-gaming activities such as conventions and exhibitions.

“Our tourism and gaming industry had for a period of time developed disorderly and expanded wildly,” Sam said in August as he announced his candidacy. “Having only one dominant industry is not beneficial for [Macau’s] long-term development and brings with it very negative impacts.”

The territory faces a steep challenge in diversifying. Government revenues remain heavily reliant on a 35 per cent gaming tax, noted David Green, founder of Newpage Consulting and a former adviser to the Macau government. Macau also faces increasing regional competition from the Philippines and Singapore, Green added.

Macau’s economy is still highly dependent on Chinese tourists, making it susceptible to Chinese policy, said Aras Poon, associate director at S&P Global Ratings.

Gaming operators enjoyed a recent revenue surge during China’s weeklong National Day holiday, as visitor numbers jumped following Beijing’s promise of stimulus spending to come.

“I don’t think Sam is going to rock the boat,” said Anthony Lawrance, founder of consultancy Intelligence Macau. “Major policies are clearly decided in Beijing . . . the only risk is that [President Xi Jinping] changes his mind and decides to crack down again.”