Inside Asian Gaming

INSIDE ASIAN GAMING | July 2009 8 Cover Story of customer less focused on hard gambling than traditional Asian table players, i.e., a more Las Vegas-style patron. The advocates of the entertainment route say slots will allow casino operators access to a huge market made up of China’s low to middle income population. They also argue slots will provide operators with the safety of stable and predictable income by diversifying the local industry from high volume but low margin VIP baccarat and its inherent volatility on returns. That’s a debate with many shades of opinion and enough material for the discussion to last from now until G2E Asia 2010. The slot directors at the round table session didn’t pretend to provide the last word on that debate, but they did share some thoughts on that most prized but often highly abstract marketing concept—the Asian, and specifically, the Chinese slot player. One of the insights gleaned from the session is hardly an insight at all. It’s more about common sense, but like many common sense things it’s worth saying. This is that just as there’s no such thing as an ‘Asian gambler’, so there’s no such thing as ‘a Chinese’ slots player in Macau. As Peter Johns, Director of Slot Operations for MGM GRAND Macau succinctly put it when describing how to select games and equipment: “It’s horses for courses.” Multiple choices There are at least four different kinds of Chinese customers playing slots in Macau— the locals, Hong Kongers, Taiwanese and Mainlanders. You can raise that to five if you includeMalaysianChinese, andevensix if you include so-called Overseas Chinese resident in countries such as Australia, Canada and the US, but with family and business ties to China and making holiday or work trips back to the region. While all these ‘Chinese’ players share a cultural and historical heritage, they also come from distinct societies and may need different things from the operators’ general slots offer. Adding to that complexity is the fact that variations in income, education and general life experience within those groups makes for even more variation in how customers respond to slot products. Complexity in customer profiling? ‘Welcome to the world of marketing’ many readers may think to themselves. They have a point. Inside Asian Gaming takes the view, however, that a small amount of knowledge and insight widely shared is better than none at all. It forms the foundations for a body of information that will help two worlds—the world of technology often, but not exclusively, created and owned by Western companies, and the world of the energetic, demanding, but also open- minded Chinese player—to meet and form a mutually beneficial association. “In 2002, slots represented less than 1% of gaming revenue in Macau. By 2008, that had risen to 5%. The growth is huge,” said Mr Lee at the opening of the session. Questions & Answers Growth in Games: Slot Directors’ Round Table Moderator: “Can you tell us a bit more about your customers and their behaviour?” Matt Hurst, City of Dreams: “After only a few days operations [at City of Dreams] it’s pretty hard to tell. But I think fromworking at Wynn and Sands and so on, we’ve certainly seen slots develop hugely, and we’ve definitely seen big players in slots. “I don’t know if anyone remembers slot machines in Macau before Sands [the first foreign-owned casino in 2004] opened, but they didn’t even have chairs in front of them. They were in the hall on the way out, just to get some last loose change from people on the way out of the door. “Now everything’s diversified a great deal. You’re getting high denomination play in slots, and we’re also getting very low denomination too.” Peter Johns, MGM GRANDMacau: “We break it down into two groups—premium denominations andmass denominations—a dollar and upwards and a dollar and down. There’s definitely a bigger growth in the premium section in the last 12 months. We’ve also seen a big growth in the mass [sector]. The type of customer varies widely from day to day.” Mr Hurst: “The highest bets we can have in Macau, I think, is the HK$10 Aristocrat machines. Based on 500 credits that’s HK$5,000—about US$700.” What segment do you focus on? Tammy Ng, SJM: “Our market is mainly the locals. What we see is that locals actually like to play slots—it’s just that we haven’t been able to give them enough product in the right positions and the right areas [of Macau]. “We’re very limited about where we can place them [gaming machines] in the suburbs. The highest grossing areas are actually in the suburbs. The general take up of slots in the past four years has been very very good. We use denominations starting from 20 cents, and 50 cents are very popular. “Our machines accept local coins. We are the only company to do that in Macau, which has been a great benefit to our customers as they can walk in off the street and use their spare change. I would say the customer profile is 50-50 between grind and mid-market. We have construction workers, quite a lot of housewives and [casino] industry people—mostly middle class [customers].” Mr Johns: “We try and cater for everyone. Higher value customers obviously get a little bit more in terms of benefits. We look after those players because of their spend. But the mass market is also important to us. The top 10-15% largely looks after itself—not literally but in the sense of customer relationships. How much business is coming from VIPs? Mr Johns: “I would say lookingat a recent month such as May, it is just over 50%.” Mr Ng: “VIPs are the main component in the localmarket.Themiddle classparticularly is a growing market for us.” Where do your customers come from? Mr Hurst: “It’s too early to say at City of Dreams. At Wynn [Macau], we probably attracted more than our fair share of Hong Kong customers. They seem to like the environment at Wynn. We also had some big players from [South] Korea—occasionally Japan,Malaysia andSingapore.There are also big players from Mainland China—probably more from there than anywhere else.”