5 The drought of legal casino gaming options in Asia could soon give way to a flood. Japan, mainland China, Hong Kong,Taiwan, and Thailand ban casinos outright. India only has casinos in Goa and Indonesia only on Bataan Island. South Korea restricts all but one of its casinos to foreigners. Asia’s casinos are largely restricted to its poorer nations. Of these, apart from the Philippines, where casinos have significant home- grown demand, casinos in Vietnam, Cambodia, Myanmar, and North Korea rely almost exclusively on gamblers coming in across their borders – mostly from China and Thailand.The border casinos have recently been hit hard as Chinese and Thai authorities cracked down on citizens gambling abroad. The tide looks set to turn, however, in large part due to the example of Macau. A former Portuguese colony with a mere 488,000 residents, Macau reverted to Chinese sovereignty in 1999, and has seen a mas- sive influx of investment from foreign casino operators following the liberalisation of its gaming industry in 2001. Macau’s newfound prosperity could spur the introduction of new casinos across Asia, with Singapore already well on the way to developing two casino- centred“integrated resorts.” Prior to liberalisation, Macau was also characterised by a lack of casi- no choice, with the mass market long neglected in favour of lucrative VIP gamblers. In 2003, high-roller baccarat in VIP rooms accounted for over 77% of the city’s casino revenue. Choice finally arrived in May 2004 when Las Vegas Sands Corp (LVS) unveiled Sands Macau, the first foreign-operated casino in the city, ending local gambling mogul Stanley Ho’s 42-year casino monopoly. Sands’ spacious and comfortable main gaming floor, along with China’s easing of travel restrictions on mainlanders wishing to travel to Macau and Hong Kong, drew a rush of mass market gamblers to Macau. By the second quarter of 2006,VIP baccarat’s share of the city’s casino revenue fell to 57% as mass market revenues at Sands Macau soared, and the VIP market stagnated. Choice in Macau will soon expand much further.Wynn Macau will open on September 6, trumpeting itself as the city’s first “destination resort,” and the third quarter of this year will also see the opening of Galaxy StarWorld, the expansion of Sands Macau, and other new properties from Stanley Ho’s SJM. Next year will witness the arrival of Macau’s first mega-sized integrated resort,Venetian Macau, which will be followed by other monoliths including Galaxy’s Mega Resort, MGM Grand Paradise and Melco-PBL’s City of Dreams. Analysts are confident that the Las Vegas experience of supply- Choice Creates Desire creates-demand will be repeated in Macau.The properties in the pipeline are world-class, but ahead of their arrival, several derelict or unfinished office and residential buildings in Macau were hastily converted into hotel-casinos in order to capitalise on surging tourist arrivals, including the Casa Real, Golden Dragon and Galaxy’s Waldo. These could soon be rendered obsolete. After all, it is quality supply that will offer real choice and create new demand. Supply without quality has thus far only found customers because of Macau’s acute shortage of gaming tables. With choice will come market segmentation.Wynn Macau will court the big-spenders, while Galaxy will attempt to provide“affordable luxury”at StarWorld – which was originally scheduled to open in Au- gust ahead of Wynn Macau, but due to construction delays, will likely trail it. Ever-bullish LVS Chairman Sheldon Adelson,meanwhile, says he is after every segment, and wants to“maximize every opportunity.” New choice will also emerge throughout the rest of Asia. An effort is under way to centralize Kazakhstan’s casino operations and create a gambling mecca along the shores of Lake Kapchagai to lure gam- blers from eastern China and the rest of Asia. Kazakhstan already has over 140 casinos, but the existing properties are hardly world-class. There will also be attempts to attract gamblers from Asia’s other emerging powerhouse, India, which, like China, has a rapidly growing middle class. August saw the opening of the Shangri-La, the sev- enth casino in the Nepalese capital of Kathmandu, with Bollywood starlet Urmila Matondkar flown in for the launch ceremony. Nepal Recreation Centre, the group responsible for all the country’s casinos, is mulling an eighth casino in the popular tourist destination of Pokhara city. If built, the Pokhara property would become the first casino outside the capital. While China will restrict casinos to Macau for the foreseeable future, the mainland government has sought to expand the range of legal gambling options in the country in order to claw back some of its citizens’massive spending on illegal gambling activities, as detailed in “China’s Wild Lottery Ride ” on page 7.The main initiative has been to introduce high-frequency lotteries, including video lottery termi- nals, which are virtually indistinguishable from slot machines. Finally, in search of even more gaming options, Inside Asian Gaming boarded a casino cruise ship operating out of Hong Kong for this issue’s “Tour of the Properties”, on page 28. Kareem Jalal We crave your feedback. Please send your comments to
[email protected] Editor and Publisher Kareem Jalal Director João Costeira Varela Business Development Manager Ricardo Carvalho Contributors Aaron Fischer, Jonathan V. Galaviz, José Ho, Karen Tang, Steve Karoul Photography Ike Graphic Designers Ricardo Borges,Vincenzo Zaccaria Editorial ሇ ޖ ϖ ދ ᆣ۸ᇤႼ۸ ࡍ۾ ૌ ށ ໊֬দ For the past 75 years, the Bally name has stood for the broadest array of superior gaming products, ranging from the latest in video and reel- spinning slot machines to cutting-edge casino management and slot accounting systems. With the recent opening of our new office in Macau, we now proudly bring our global vision of excellence and innovation to this rapidly emerging and dynamic gaming market. • We offer the broadest array of gaming technology products from traditional slot machines to advanced table-management systems in the gaming industry • We are the undisputed world leader in slot management and slot accounting systems with more than 345,000 machines running a Bally system in 625 locations worldwide • We feature an extensive library of video gaming titles on the robust, reliable and technically advanced ALPHA OS™, including our hot new multi-level progressive games • We offer an exciting array of innovative high-coin reel-spinning slots sharing the same ALPHA OS as our video slots • We are the systems provider of choice at the Sands Macau and a table systems technology provider to Galaxy Entertainment Group For more information about Bally products or our vision for Macau, please contact Asia Managing Director Cath Burns at +853-785603 or
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