Inside Asian Gaming

inside asian gaming October 2015 26 Cover Story relationships, in combination with an innovative product and Las Vegas’ global reputation for world-renowned entertainment, we will grow the overall market and increase the number of visitors.” Observers largely agree. Mr Jones, for one, points to Genting’s success in Singapore, Malaysia and New York and sees a company decidedly oriented toward mass over VIP. He believes the Las Vegas focus will be on the domestic market, notably the Asian-American community, and they’ll focus on “mass out of Asia”. “North America is high on the Chinese/Asian list for outbound travel, and Genting knows this. … Most of the Strip focus is on the Chinese high end, not the grind Chinese customer, so there is an opportunity.” He says it’s important to bear in mind that “The model in Las Vegas isn’t the same as the model in Macau.” In 2014, gaming generated less than 37% of total Strip revenues, light years away from the 95% or more characteristic of Macau. The “writing on the wall,” Mr Jones says, “is you don’t want to over-focus on gaming. That’ll be what we’ll see with these properties. I think we’ll see it play out more with Crown, which will be disproportionately focused on non- gaming, and I think that is exactly where they should be focused.” Still, says Mr Pirosch, when you’re talking about capital costs in the range of $4 billion, “You need a lot of gaming to support that. You have to have a plan for executing that. You have to have a plan for everybody. It’s a fallacy that you’re building for just the high end. You have to provide an experience for the everyday folks, whether it’s shopping, dining, whatever. There are 100 to 200 people total driving all that baccarat revenue. You don’t build 4,000 rooms for those guys.” Mr Gallaway says, “The important thing to remember is it’s owned by Genting. So it’s going to bring a new database of players. It’s going to grow the market.” As in Asia, it comes down to a belief in the strength of the mass player Resorts World Las Vegas will be relying on. Ultimately, it comes down to how much you believe in Las Vegas, and you’d be hard-pressed to find many in the industry who don’t. Mass actually is enjoying something of a rebound on the Strip in the midst of baccarat’s decline. Revenues in the sector are up 2% in the trailing 12 months through August, 4% year to date. Slot revenues surged 9% in July and 12% in August. “The rest of the market, the mid-market, is doing OK,” notes Mr Pirosch. “The increases are in domestic play. We’re seeing it in the regional markets as well along with a slow and steady improvement in the national economy. On the Strip it means revenue that’s shared by a greater portion of the market. It points to a pretty healthy state of affairs.” As Mr Gallaway puts it, “It’s not going anywhere, it’s still Las Vegas. As great as Macau is in terms of gaming revenue, Las Vegas is still the far better experience. It is still the premier gaming destination in the world.” When you’re talking about capital costs in the range of $4 billion, says Brent Pirosch of CB Richard Ellis, “You need a lot of gaming to support that. You have to have a plan for executing that. You have to have a plan for everybody. It’s a fallacy that you’re building for just the high end…”