Inside Asian Gaming

17 16 Australia • Europe • North America • South Africa • Asia World Headquarters • 600 Airport Road, Lakewood, NJ 08701 www.gaminglabs.com No matter what time zone you’re in, GLI is your answer to accuracy, independence and integrity. With offices all over the world, 24-hour customer service, the most technologically capable equipment around, full-time and fully trained engineers, it’s no wonder 400 jurisdictions worldwide choose GLI. When it comes to your business, don’t accept anything less. DON’T ACCEPT ANYTHING LESS ONE COMPANY. ONE WORLD. cau government – including improvements to the airport to accomodate a new generation of super jumbo jets and a light rail system – and Macau has the potential to become China’s sport and entertainment hub. Jose Tavares of the Macau Sport Develop- ment Board (Instituto do Desporto) expects only about 2,000 of the 15,000 spectators attending the Federer versus Sampras exhi- bition match on 24 November to be locals. He expects the bulk of the spectators for the event – branded as The Venetian Macao Tennis Showdown and held in The Venetian’s arena – to come from Hong Kong and main- land China, where tennis is extremely popu- lar and consumer spending power for big event tickets is a lot higher. CLSA’s Gavin Ho points out that visits to Macau by Hong Kong residents showed strong growth of 36% year-on-year in the fourth quarter 2006. His report adds:“A lot of this visitation would be repeat travels, which demonstrates the ability of new and qual- ity properties to attract repeat traffic into Macau. This will be a key value proposition for Macau going forward. While Las Vegas is a heavy repeat-travel market, the develop- ment of such a pattern in Macau will also be pertinent to its continued rapid growth as new visitors might exhaust eventually. In 4Q06, repeat travel has shown how it could help push gaming growth significantly.” The positioning of Macau as a destina- tion for premium sports and entertainment events could help achieve this. Mr Ho continues:“Integrated resorts, con- ventions and entertainment will be added catalysts [to growth]. These will not only at- tract repeat travel and lengthen the stay per visit,but also pull in a new customer segment that comes to Macau for vacation and leisure, rather than pure gambling.” Improving the software and diversify- ing the entertainment offer away from pure gambling certainly seems to have helped Las Vegas. According to Las Vegas’city council,there are now 12 tourist and family attractions, in- cluding a zoo, 12 theatres and performing arts centres including a municipal concert hall and 15 museums and galleries, one of them an exhibition devoted to the late en- tertainer Liberace. Las Vegas lists 10 specta- tor sports events for 2007, including NASCAR motor racing and NBA All Star Week. It also has 78 golf courses – 14 of them private, as well as 49 wedding chapels. Coinciding with this increase in things to do has been a steady march upmarket in the profile of the average Las Vegas visitor, sug- gests research commissioned by the Las Ve- gas Convention and Visitor Authority (LVCVA). The proportion of surveyed visitors with a household income of US$40,000 or more has risen from 66% in 2003 to 78% in 2006. The number of respondents reporting household annual income of US$100,000 or more rose from10% in 2003 to 24%by 2006.In the same period, the average age of visitors has fallen from 50.2 years to 48.0 years – a significant shift in a country with an ageing population and a city where 87% of visitors are domestic tourists. The proportion of Las Vegas visitors with a college diploma has also risen from 41% to 48% in that four-year period. Las Vegas and surrounding Clark County have seen rises in expenditure in every ma- jor consumer category, including lodging, food and drink, shopping, shows and sight- seeing. Although Las Vegas’ dependence on gambling revenue as a proportion of total income has been falling (it now stands at 47.5% for Clark County), the gross take from casinos rose 8.3% in 2006 to US$10.52 billion. In 2006, 87% of all visitors gambled (down only 1% on 2003) and the average amount they budgeted for it rose 32.8% between 2003 and 2006, from US$490.9 to US$651.9. It doesn’t automatically follow though that giving people more things to do attracts high-spending visitors. In the 20 years since conventions and general entertainment began to develop in Las Vegas, the American economy has also grown and Americans have become richer, so some of the transformation of the Nevada city from a serious gambling town to a holi- day resort may just be the march of history and the taming of the formerly ‘Wild’West. It’s hard though to explain away Las Ve- gas’ move up the value chain as pure ‘dumb luck’. A more likely answer is that by diversify- ing your entertainment offer, you give more people – including the high-spending mid- dle class – more reasons to come. Alicia Malone of the Las Vegas Conven- tion and Visitor Authority says: “Our experi- ence has been the demographic here has been changing significantly. Las Vegas is no longer just a place you come to gamble. We have things like shows, fine dining and a whole world of new attractions and ame- nities that appeal to people looking for an overall vacation destination.” If Macau can now develop the entertain- ment software worthy of its increasingly Las Vegas-style gaming hardware, the potential benefits for investors are likely to be huge. World No. 1 Roger Federer will play former No. 1 Pete Sampras at the Venetian in Macau on Novem- ber 24