IAG 2006-08-09 Aug-Sep - page 6-7

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Thedroughtof legal casinogamingoptions inAsiacould soongive
way toaflood.
Japan,mainlandChina,HongKong,Taiwan,andThailandbancasinos
outright. Indiaonlyhas casinos inGoaand IndonesiaonlyonBataan
Island.SouthKorea restrictsall butoneof its casinos to foreigners.
Asia’s casinosare largely restricted to itspoorernations.Of these,
apart from thePhilippines,wherecasinoshave significanthome-
growndemand,casinos inVietnam,Cambodia,Myanmar,andNorth
Korea relyalmost exclusivelyongamblers coming inacross their
borders –mostly fromChinaandThailand.Theborder casinoshave
recentlybeenhithardasChineseandThai authorities crackeddown
oncitizensgamblingabroad.
The tide looks set to turn,however, in largepartdue to theexample
ofMacau.A formerPortuguesecolonywithamere488,000 residents,
Macau reverted toChinese sovereignty in1999,andhas seenamas-
sive influxof investment from foreigncasinooperators following
the liberalisationof itsgaming industry in2001.Macau’snewfound
prosperitycould spur the introductionof newcasinosacrossAsia,
withSingaporealreadywell on theway todeveloping twocasino-
centred“integrated resorts.”
Prior to liberalisation,Macauwasalsocharacterisedbya lackof casi-
nochoice,with themassmarket longneglected in favourof lucrative
VIPgamblers. In2003,high-rollerbaccarat inVIP roomsaccounted
forover 77%of thecity’s casino revenue.Choicefinallyarrived in
May2004whenLasVegasSandsCorp (LVS) unveiledSandsMacau,
thefirst foreign-operatedcasino in thecity,ending local gambling
mogul StanleyHo’s42-year casinomonopoly.Sands’spaciousand
comfortablemaingamingfloor,alongwithChina’seasingof travel
restrictionsonmainlanderswishing to travel toMacauandHong
Kong,drewa rushofmassmarketgamblers toMacau.By the second
quarterof 2006,VIPbaccarat’s shareof thecity’s casino revenue fell
to57%asmassmarket revenuesat SandsMacau soared,and theVIP
market stagnated.
Choice inMacauwill soonexpandmuch further.WynnMacauwill
openonSeptember 6, trumpeting itself as thecity’sfirst“destination
resort,”and the thirdquarterof thisyearwill also see theopening
ofGalaxyStarWorld, theexpansionof SandsMacau,andothernew
properties fromStanleyHo’sSJM.Next yearwillwitness thearrival
ofMacau’sfirstmega-sized integrated resort,VenetianMacau,which
will be followedbyothermonoliths includingGalaxy’sMegaResort,
MGMGrandParadiseandMelco-PBL’sCityofDreams.
Analystsareconfident that theLasVegasexperienceof supply-
ChoiceCreatesDesire
creates-demandwill be repeated inMacau.Theproperties in the
pipelineareworld-class,but aheadof their arrival,several derelict
orunfinishedofficeand residential buildings inMacauwerehastily
converted intohotel-casinos inorder tocapitaliseon surging tourist
arrivals, including theCasaReal,GoldenDragonandGalaxy’sWaldo.
Thesecould soonbe renderedobsolete.After all, it isquality supply
thatwill offer real choiceandcreatenewdemand.Supplywithout
qualityhas thus faronly foundcustomersbecauseofMacau’sacute
shortageofgaming tables.
Withchoicewill comemarket segmentation.WynnMacauwill court
thebig-spenders,whileGalaxywill attempt toprovide“affordable
luxury”atStarWorld–whichwasoriginallyscheduled toopen inAu-
gustaheadofWynnMacau,butdue toconstructiondelays,will likely
trail it.Ever-bullishLVSChairmanSheldonAdelson,meanwhile,sayshe
isaftereverysegment,andwants to“maximizeeveryopportunity.”
Newchoicewill alsoemerge throughout the restofAsia.Aneffort is
underway tocentralizeKazakhstan’s casinooperationsandcreate
agamblingmeccaalong the shoresof LakeKapchagai to luregam-
blers fromeasternChinaand the restofAsia.Kazakhstanalreadyhas
over 140casinos,but theexistingpropertiesarehardlyworld-class.
Therewill alsobeattempts toattractgamblers fromAsia’sother
emergingpowerhouse, India,which, likeChina,hasa rapidlygrowing
middleclass.August saw theopeningof theShangri-La, the sev-
enthcasino in theNepalesecapital of Kathmandu,withBollywood
starletUrmilaMatondkarflown in for the launchceremony.Nepal
RecreationCentre, thegroup responsible for all thecountry’s casinos,
ismullinganeighthcasino in thepopular touristdestinationof
Pokharacity. Ifbuilt, thePokharapropertywouldbecome thefirst
casinooutside thecapital.
WhileChinawill restrict casinos toMacau for the foreseeable future,
themainlandgovernmenthas sought toexpand the rangeof legal
gamblingoptions in thecountry inorder toclawback someof its
citizens’massive spendingon illegal gamblingactivities,asdetailed
in“China’sWildLotteryRide
onpage7.Themain initiativehasbeen
to introducehigh-frequency lotteries, includingvideo lottery termi-
nals,whicharevirtually indistinguishable from slotmachines.
Finally, in searchof evenmoregamingoptions,
InsideAsianGaming
boardedacasinocruise shipoperatingoutofHongKong for this
issue’s“Tourof theProperties”,onpage28.
Kareem Jalal
Wecraveyour feedback.Please sendyour comments to
EditorandPublisher
Kareem Jalal
Director
JoãoCosteiraVarela
BusinessDevelopmentManager
RicardoCarvalho
Contributors
AaronFischer,JonathanV.Galaviz,JoséHo,KarenTang,SteveKaroul
Photography
Ike
GraphicDesigners
RicardoBorges,VincenzoZaccaria
Editorial
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