Inside Asian Gaming

November 2009 | INSIDE ASIAN GAMING 7 outer island. Such an arm’s length approach—apparently designed to make it harder for Taiwan citizens to spend their children’s lunchmoney on baccarat—is likely to succeed only inmaking theTaiwanmarket dependent on customers from Mainland China. How Beijing will react to competition for its own gaming haven of Macau is hard to predict. In Vietnam and Cambodia, only foreigners and locals with foreign passports are allowed to use the casinos. The message in this supposedly liberalising Asian market remains clear: ‘We support casino gambling, as long as someone else’s citizens are the ones losing the money.’ ‘Liberalisation’ of a jurisdiction’s casino licensing system without an accompanying liberalisation of market access is a paper tiger. It artificially limits the size of the market and makes it dependent on foreign trade. That foreign trade in turn is vulnerable to factors beyond the casino operator’s control, such as cross-border trade and political disputes and even cross-border military clashes. Despite the huge progress made economically in Asia in the last decade, the flaring of historical tensions between nations occasionally gives the region a distinctly Third World feel. Look what happened to trade at some of Cambodia’s border casinos after Cambodian and Thai troops started shooting at each other last year. Flicking the switch Even Macau’s free market access system is subject to external pressures. Officials in Mainland China have shown on repeated occasions a willingness to intervene in the market by controlling the flow of tourists coming from China under the Individual Visit Scheme. The rationale appears to be a desire to stop the Macau market growing too quickly and getting too out of balance with the economy of neighbouring Guangdong province—the part of China currently providing the bulk of Macau’s Mainland visitors. Supporters of the gradualist theory argue access restrictions are just a phase— the equivalent of industry growing pains. They point out that gaming liberalisation is essentially a one-way street with a taxation gold mine at the end of it. Market access gatekeepers are normally governments either at national or state level. And once they start driving down that one-way street and catch sight of the gold mine, they have no inclination to do a U-turn. Gradualists argue, therefore, that market access controls are a necessary hypocrisy; a price to pay politically to win the acceptance of key interest groups such as religious leaders and community leaders. Something similar happened in the United States, where at one time many individual states considered horse race betting a daring break with puritan tradition. Then they allowed off- track betting, and then they allowed a few slot machines. And now, bingo! Nineteen states and one territory at last count directly licence commercial casino gaming and even more states indirectly play host to Tribal gaming within their state boundaries. Softly, softly A number of commentators believe that in a few years, when Singapore has had time to study the economic impact of domestic casino resorts on the city state’s horse racing and lottery monopoly, and the social impact of casino gambling, it will drop its policy of Cover Story Genting’s soon-to-open Resorts World at Sentosa