Inside Asian Gaming

January 2008 | INSIDE ASIAN GAMING 31 Asian business is going. We typically didn’t serve Asia from Asia. We did it from Australia. Three years ago though we made the decision to ramp up our whole Asian business and part of that was driven by Macau’s growth as a gaming centre—the gaming centre in Asia. “As a manufacturer we have components made in different parts of the globe and have them brought in to our integration centres to assemble. “The facility is very typical of an assembly line,”adds Mr Jolly.“We have parts areas, storage areas, roller beds and working stations. We call them order fulfilment centres, and we have them in Las Vegas for our North American market and in London for our European market, so this centre in Macau is an extension of that policy. Testing, testing “We started with some test orders here. In 2007, we built a couple of big orders in Macau for The Ve- netian, for Crown Macau and for Ponte 16. “We are doing less and less manufacturing in Australia. We are building cabinets in China, some components for sound packages in Taiwan, other parts from Malaysia and other places, and they are then sent in module form to our order fulfilment centres around the world and from there it’s an assembly line system. Globally we have order fulfilment cen- tres in Las Vegas for the Ameri- can market, in London for our Europe market, and Japan for that market,” he explains. “An important issue was obviously ensuring that we could maintain Aristocrat quality standards and we’re very happy with the results. “We have an expatriate running the Macau facility and the rest of the staff are local with some trainers that have come in to teach the locals what to do. Our aim is to become very self-sufficient for Asia in that fa- cility, and that will help to de- velop our local staff and cre- ate further opportunities for the local employment market,” says Mr Jolly. “We have made Macau our Asian headquarters and will use it as the base for develop- ing all our regional markets, including strong businesses in the Philippines, Singapore, Ma- laysia and Cambodia.” Slots & Tech Macau’s economy. They have also been keen to point out that, in the long term, gaming is a partner in this process rather than a villain attempting to create an economic monoculture. Just as Hong Kong had to re-invent itself in the 1980s and 90s from an industrial city into the head office for Guangzhou manufacturing, it was never going to be possible for Macau to cling on to its post- World War II competitive advantage in low-value manufacturing once mainland China and its bargain-basement labour came on the scene. In almost every European post-industrial economy, ser- vices, including high tech and value-adding sub-assembly work, have become the main employers. Diversification In Las Vegas, although gaming revenues have risen year on year in real terms, the city’s dependence on gaming revenues as a pro- portion of total income has declined ever since the 1980s when gaming operators began building conference and general enter- tainment facilities. In the latest burst of infrastructure development in the Nevada city, MGM Mirage is spending US$7.4 billion to build a collection of 3,600 luxury apartments called CityCenter, due to open in late 2009. In the second quarter of 2007, gaming accounted for only 37% of the company’s total revenues. In Macau, Mr Jolly cautions against any suggestions that Macau could become the world manufacturing base for Aristocrat. He says:“At this stage it is still one step at a time. It makes more sense to do assembly on a regional basis in today’s world. “In this particular case it comes down to looking at where our