Editor and Publisher Kareem Jalal Director João Costeira Varela Business Development Manager Ricardo Carvalho Operations Manager Jos Abecassis Contributors Gavin Ho, Gary Pinge, Richard Marcus,Tom Skotnicki, Charles Anderer Photography Ike Graphic Designers Brenda Chao Inside Asian Gaming is published by Must Read Publications Ltd Suite 1907, AIA Tower, 215A-301 Av. Comercial de Macau - Macau Tel: (853) 6646 0795 For subscription enquiries, please email
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[email protected] or call: (853) 6646 0795 www.asgam.com 5 Editorial Sands Macao may have become the biggest table-gaming casino in the world, and generates more gaming revenue than many coun- tries—last month, Inside Asian Gaming visited the Philippines (report to appear in next issue), and while the various casinos were hives of activity, the entire country’s gaming revenue was less than half the revenue of Sands Macao. The properties opening to date in Macau have concentrated pri- marily on gambling. Sands Macao famously scaled back its high-end dining venues to make way for more tables and its 700-seat theatre has yet to stage a performance, over three years after Sands’ opening. Wynn Macau closed down its Tryst nightclub, and plans to replace it with more VIP gaming space. MGM Mirage CEO Terry Lanni, mean- while, told Inside Asian Gaming that MGM Grand Macau, scheduled to open later this year, will not have any significant entertainment com- ponent, taking a “wait and see approach” to installing such facilities once proven demand appears for them. The US$2.4 billion Venetian Macao, when it opens on August 28, will take the bold step of offering expansive and diversified entertain- ment, dining, retail and of course convention and exhibition facilities. It will give an important first indication of whether Macau can evolve into a diversified tourism hub in the Vegas mould, or will remain driv- en solely by hardcore gambling. The new demographic of visitor drawn to Macau by the com- ing wave of mega resorts will dramatically alter the tourism and also gaming landscapes. Slot machines contributed a mere 4.2% of casino revenue in Macau in the second quarter of 2006,compared to close to 70% in Vegas as a whole (and over 50% on the Strip). Macau’s slot revenue is already showing explosive percentage growth as traditionally table-loving Chinese gamblers finally start trusting and becoming familiar with gaming machines—slots made up a mere 0.8% of revenue in 2003. Hyperlinks and jackpots have proved especially popular with Chinese players seeking a big win. While slots will continue to consolidate their following among Chi- nese players, the rise of gaming machines in Macau will be fuelled by the arrival of more international tourists, drawn by the mega resorts. “While Macau’s gaming market today is predominantly driven by mainland China and Hong Kong, what will be interesting to see is the influence players from different countries will have on the market as the Venetian opening on Cotai drives an influx of convention visitors to the city,” says Aristocrat General Manager Asia Pacific Ken Jolly (in- terviewed on page 34 of this issue). The half-million sq. ft casino at Venetian Macao will devote a lot more of its floor space to slot machines than any other casino in the city. When Sands Macao opened,it had a slot to table ratio of 1.46,but Venetian’s ratio at opening will be 5.06. High returns from putting in more tables had previously discouraged investment in slot machines in Macau,but the tide is clearly turning as both table and slot capacity show explosive growth, but wins per slot have remained steady while wins per table have declined. The capacity increase has boosted overall casino revenue, which jumped 47.5% year-on-year in the first half of 2007 to US$4.7 billion. The Venetian Macao opening could help drive revenue towards or even past the US$10 billion mark for the year. Ever-bullish Las Vegas Sands Corp (LVS) says it expects full occu- pancy at the 3,000 all-suite Venetian Macao soon after opening. Ac- cording to LVS President William Weidner, occupancy is expected to reach 85% to 95% about a month into business “We expect the hotel to be wall-to-wall by October,” said Mr Weidner, adding that the property isn’t targeting just gamblers, but other vacationers and business visitors as well, thus lengthening the duration of each stay.Visitors to Macau currently stay a mere 1.1 days on average, and increasing the length of stay would have an expo- nential impact on hotel demand and occupancy. Mr Weidner expects the average guest at Venetian Macao to stay three to four days, He also predicts the property will draw 40,000 visi- tors per day in its initial phase. In addition to the casino, the property will feature 1.2 million sq. ft of convention and exhibition space, and almost a million sq. ft of retail areas. Venetian Macao also boasts a 15,000 seat stadium for staging sporting and entertainment specta- cles, and a 1,800-seat theatre, which will host a permanent Cirque du Soleil show from next year. Including Venetian Macao, LVS has a combined US$12 billion worth of investment in progress on Macau’s Cotai Strip. LVS plans to stock Cotai with 20,000 high-end rooms in various hotels, along with hundreds of restaurants and shops, a labyrinth of expo facilities and performance stages. Other operators also have big plans for Cotai, with Melco PBL Entertainment planning to unveil the US$2.47 billion City of Dreams complex by the end of 2008, and the US$2 billion Macao Studio City set to open in 2009. Several bottlenecks stand in the way of the massive development underway, as outlined on page 12, but once the mega resorts arrive in Macau, the big money is betting that the new facilities will indeed draw a new breed of visitor to the city. Kareem Jalal We crave your feedback. 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