IAG 2006-06-07 Jun-Jul - page 10-11

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achines are making their mark in
Macau. Slot machines earned US$53million
in the first quarter of 2006 – almost twice as
muchas in thewholeof 2003.Still,evennow
they account for only 3.4% of total gaming
revenue, compared to close to 55% on the
Las Vegas Strip and over 70% in downtown
LasVegas.
Thenumber of slotmachines inMacau is
alsogrowing rapidly froma lowbase. In2003,
therewere amere 814machines in the city,
but by the first quarter of 2006 the number
hadgrownoverfive-fold to4,223.The ratioof
Riseof theMachines
Macau is pegged to experience greater slotmachine growth over the next few years than anywhere else
in theworld. Slot hall operators first drewChinese gamblers tomachines by offering electronic versions
of popular table games.While these electronic table games originally dominated the rapidly growing
machinemarket, InsideAsianGaming’s JoséHodiscovers that traditional slots are now taking the lead
slot machines to gaming tables inMacau is
now2.6 times,compared toover20 timeson
theLasVegasStrip.All thissuggestspotential
for explosivegrowthof slots inMacau.David
Green, director of PricewaterhouseCoopers’
Macau gaming practice, predicts there will
beasmanyas13,000slotmachines inMacau
by2008.
Why Tables Dominate
CLSA’sAaronFischerofferedoneexplanation
for thegreaterpopularityof tables thanslots
amongChinesegamblers inhisauthoritative
MacauMania report.“The styleof gaming is
different,with amuchhigher level of player
intensity inMacau than in Las Vegas. Gam-
ing in Macau is a battle against the house
whereas in Las Vegas it is treatedmore as a
source of entertainment. Players in Macau
aremore likely tobe froma lower socio-eco-
nomic backgroundbut are alsoprepared to
spend more of their disposable income on
gaming. These reasons favour table games
where the stakes arehigher.”
Until recently, gamblers in Macau also
believed that slots–known in theCantonese
dialectas“hungry tigers”–were riggedbyca-
sinos to offer meagre payouts.With increas-
ing competition in the slotmarket following
the liberalisation of the gaming industry
in 2002, slot machines inMacau are paying
outmore. Furthermore, as Chinesegamblers
become familiarwith slots, they are realising
that theydon’toffer suchabaddeal.
Although slotshaveamuchhigher theo-
retical houseadvantage than tablegames, in
practice,casinosendupkeepingmuch lessof
themoney spent on slots thanon the tables.
At Sands Macau, for example, the average
tablewin percentage asmeasured as a per-
centageof tablegamedrop is 15-16%,while
the average slotmachinewinpercentage as
measured as a percentage of slot machine
handle is 6-7%. Chinese players, keen to get
themost bang for their gambling buck, are
realising that they can satisfy their gambling
desireon slotswithapotentiallymuch lower
total outlay thanat the tables.
Another explanation for the dominance
of tables games in Macau is that Chinese
gamblers supposedly believe they can influ-
ence theoutcomesby spottingpatterns and
picking luckycardsornumbers,whereasthey
leave their destinies to unfeeling and pos-
sibly corrupt computers when playing slots.
Suchattitudesarequicklychanginghowever,
in largepartdue to theeffortsofMacau’sslot
hall operators toeducateChinesegamblers.
Familiarity Breeds Comfort
Inorder tomake table-lovingChinese gam-
blersmore comfortablewithmachines, slot
hall operators in Macau brought in elec-
tronic versions of popular tables games
such as sic bo, baccarat and roulette. These
electronic table games, known asmulti-ter-
minal games, offer a hybrid between tables
and slots, and are a fairly new innovation
globally. Macau is the main market where
multi-terminal games have really taken off,
but while machine revenue in the city was
initially dominated by such machines, ac-
cording to slot hall operators Mocha Slot
and Emperor Palace Casino, traditional slot
machines havenow taken the lead,with the
operatorshavingachieved their objectiveof
usingmulti-terminal games todriveChinese
gamblers to slots.
“Most of our players started withmulti-
terminals because they are familiar with
thesegames.Butslowly theybecamecurious
about the slot machines next to the multi-
terminals. When they saw more and more
peopleactuallywinning jackpots,theybegan
to see thepoint of slots,”saysTedChan,gen-
eralmanager ofMochaSlot. Mr.Chan’s“ ulti-
mate intention is tomoveplayers away from
low-denom electronic table games to slot
machines,”sincehebelieves slots canhavea
more lastingappeal than tablesgames.“Even
thoughyoucanhave thewholecollectionof
table games onmachines, the way they are
played is always the same. Slots, with their
varietyof interface, themeanddesignare far
moreentertaining.”
MochaSlot is thebrainchildof Lawrence
Ho, sonofMacaugaming tycoonStanleyHo.
The youngerMr.Ho claimed that in thepast,
Macau’s casinos only included slotmachines
inorder to“lookmore like a casino.” Inorder
tomake slotsmore appealing, Lawrence Ho
set out to establish a string of trendy and
cosy slot outlets under his company, Melco
InternationalDevelopment.
ThefirstMochaSlotoutlet,a3,000square
foot venue inMacau’s Royal Hotel, opened
in late2003.Recognising the limitedappeal
of traditional slotmachines at the time,Mo-
cha Slot introduced multi-terminals, which
quickly became a hit, generating roughly
70% of Mocha Slot’s total revenue, accord-
ing to Mr. Chan. The multi-terminals drew
crowdswhograduallybegan toexplore the
other idlemachines in theoutlets, andnow
multi-terminalscontributeonlyaround40%
of total revenue,with traditional slotsmak-
ingup the rest.
Automated Benefits
One third of the machines at Emperor Pal-
aceCasino’s slot hall aremulti-terminals.The
casino’s assistant general manager, Patrick
Lam, points out that electronic table games
can speedupplay, andhence raise turnover
andcontribute tooverallplayerconvenience.
Forexample,a traditional SicBogamecanbe
heldup as croupierswait for additional bets
andpay out winnings,whilemulti-terminals
run at preset intervals and automatically
creditwinningplayers.
As the casino boom drains the local la-
bour pool and theMacaugovernment con-
tinues its banon foreigndealers inorder to
restrict high-paying casino jobs to locals,
the growing popularity of multi-terminals
and slots has proved a godsend to casino
operators. Mr. Lam says that the Emperor
PalaceCasino,operatedbyStanleyHo’sSJM,
is unable to expand because of a lack of
dealers.He says that the casino iswaiting to
hireat least 40dealers inorder toopen four
more tables – tendealers areneeded toop-
erateone tableon three shifts.On theother
M
Inorder tomake table-loving
Chinesegamblersmore
comfortablewithmachines,
slot hall operators inMacau
brought in electronic
versions of popular tables
games such as sicbo,
baccarat and roulette
RapidRoulette at GrandWaldo
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