Stanley Ho's famed Lisboa complex

Casinos are the dominant industry in Macau - a popular weekend retreat for residents from Hong Kong, many of them avid gamblers.

But a government source said the system would be abolished next year.

He said the government hoped to increase its income from gambling taxes.

Although Mr Ho will lose his monopoly, his 10 casinos are expected to retain their licences.

Experts

Macau, which legalised gambling in 1847, introduced the monopoly system 63 years ago.

A committee headed by Macau's Chief Executive, Edmund Ho Hau-wah, is expected to hire several foreign gaming industry experts to look at the options.

Macau's economy relies on its casinos

"They will study how Australia and America are running their gaming industries," a government source said.

"Competition among several casino operators is meant to increase the government's income from gambling taxes."

However, Chinese President Jiang Zemin has already said that mainland Chinese companies will be barred from joining Macau's gaming industry.

Revenue

Mr Ho was granted the monopoly as head of a group of Hong Kong investors by Macau's former colonial power, Portugal, in 1962.

His company, STDM, has since grown into Macau's biggest private enterprise, generating about half the government's annual budget.

Many Macau gamblers come from Hong Kong

Aside from its casinos, STDM operates affiliated businesses including horse and greyhound racing, lotteries, hotels and high speed ferries between Macau and Hong Kong.

The company, whose assets totalled US$2.87bn last year, is also involved in banking, aviation, shipping, tourism and property.

Macau was handed back to China last December ending 442 years of direct rule from Lisbon.

Like the former British colony of nearby Hong Kong, it is ruled as a special autonomous region under the so-called "one country two systems" formula.