Inside Asian Gaming

INSIDE ASIAN GAMING | July 2009 about Macau losing money because of visas [for Mainland Chinese visitors] are just spurious. Macau is losing high-end business because people haven’t got the money. It’s that simple. “Companies in China are going broke. Businessmen in Hong Kong haven’t got the money in their pocket to go and throw into gambling tables. Whenever that happens, it’s going to have an effect. No sensible gambling business can sustain itself just on the top end of the market,” adds Mr Kinsman. “This industry is based on having a spread—just like a bookmaker. When a bookmaker does a book, he looks at when he’s going to take a bet, against what he already has. He measures his risk. VIP risk “Now when you’re 100% in the high roller business, you’re really better off getting a gun and playing Russian roulette— but with a bullet in every chamber. That’s because if you’re in the high roller business exclusively then you will get hurt—no question. You don’t have enough [hedging ability] at any one time to offset. And if the high rollers win in mass, then you get a situation like we’ve seen recently at Altira Macau, and elsewhere, where they [the house] gets wiped out. That can so easily happen,” says Mr Kinsman. “When you have an undiversified business you are basically playing with fire and you will get caught. The sensible venues are people like Grand Lisboa, like The Venetian, likeWynn, etc., that have allowed themselves to build a mass business and then to offset that against a healthy high roller business,” he adds. “We still don’t know the truth about the credit situation. Some time, somehow, it will come out, but who knows when? The write- offs could be horrendous. In any case, the high end of the market has lots of inherent dangers. The regulator has to really be vigilant, because with the junket [operator] you’ve introduced another party; you have the debt collection issue—in all it really becomes a difficult business to manage. It’s great while it’s good, but it’s horrendous when it goes the other way. 22 table players because of its different style.When technology interacts with traditional table games it actually has the capacity to create a distinctively different product, he argues. Selling points At G2E Asia 2009, Mr Kinsman explained to Inside Asian Gaming some of the specific features of Weike’s new dual-purpose electronic table. “We’ve added a full baccarat results presentation, which is important to players. We’ve also packaged that in such a way that they can identify with it,” states Mr Kinsman. “These games can run at two to three times the game cycle per hour of a live table. The shuffle is instantaneous, it’s doesn’t take minutes [as with a dealer-only table]. It doesn’t shut the game down for 10 or 15 minutes [per hour] while it’s being done,” explains Mr Kinsman. Security “It’s also a surveillance dream, because there are no [physical] cards, there are no chips—they’re digital, so they can’t be forged. There’s bill acceptor and ticket in ticket out technology, which means the player has total control over when he comes and goes and what he does. He doesn’t have toworry about buying chips and then going to a window to cash them. He doesn’t have to worry about cashing non-negotiable chips for negotiable chips—that sort of thing.” At G2E Asia 2009, at least one slot director suggested the advent in recession-hit Macau of live tables offering minimum bets as low as HK$50 had drastically reduced the commercial argument for installing multiplayer electronic games in casinos. Mr Kinsman profoundly disagrees. “I wouldn’t think he’s doing his job very well if he believes that,” he states. “When I see casinos in Macau that have decided to scale down their slot operations, I worry for them. Electronic gaming is going to have a place in the industry worldwide. I once thought it could be as much as 10% of a mass gaming floor. I’m now realising that my estimates are too low. I feel sorry for a slot manager that doesn’t realise that.” Rebalancing Act Electronic games are a vital hedging tool against VIP table volatility, says David Kinsman “If it was the case that Macau was only high rollers, then the foreign companies shouldn’t bother building casinos. They should just have small operations. Casinos need to be a proper balanced business, because that’s what they’ve got to be to survive,” suggests David Kinsman of Weike. “Macau is changing character—I don’t care what anybody tells you to the contrary. No business can sustain itself on the high roller end indefinitely—for all sorts of reasons,” he asserts. “The arguments that are being given Weike