This study illustrates that the gaming market is underutilized in mainland China, and legalizing casino gambling is strategically helpful in mitigating the problem of market underutilization and preventing a mass exodus of capital to foreign gaming establishments. An analytic model is constructed to analyze and predict the possible consequences of such a prospective policy for a major gaming destination: Macao. To maintain its economic prosperity, Macao is advised to upgrade its gaming facilities and service levels, and to promote itself as a world-class gambling destination. In the long term, it must widen its clientele base and diversify its economy.