Inside Asian Gaming

Asian Gaming 50 – 2011 includes Genting’s name spelled out in Chinese characters. EPL matches are screened live to tens of millions of people all over Asia, so that with this one deal the Genting brand message reaches customers and potential customers for its casino resorts in Malaysia and in Singapore, plus foreigners thinking of visiting Resorts World Manila in the Philippines (Filipinos are baseball and basketball aficionados, rather than being soccer fans). While Genting and RWS may have been working hard on branding and marketing to customers, they have a more cautious relationshipwith the investment community and media. As mentioned earlier, Genting Singapore gives fewer public details on its Singapore casino operations than does LVS. While that may partly be a function of the fact that Genting Singapore is Singapore- listed and LVS is US-listed, it also suggests a difference inmanagement culture compared to LVS. Some observers think that Genting is much more bureaucratic and even sclerotic in its management structures than most Western gaming operators. That may reflect to some extent the fact that Genting Group is still very much a family business and that ‘investor power,’ and particularly institutional investor power, is not as advanced in Malaysia as it is inWestern marketsandWesternpubliccompanies.MrLim is a son of Genting’s founder, the late Lim Goh Tong, and has run Genting Group since 2003. Mr Lim is certainly outward-looking in terms of his life experiences—he was educated at the University of London and Harvard Business School. But he also belongs to Malaysia’s patrician class of wealthy Straits Chinese. These are descendants of Chinese who migrated to the Malay peninsula in the 18th, 19th and early 20th centuries from mainland China. They were often very poor labourers, but their progeny have in many cases become self-made millionaires or billionaires. Forbes recently estimated Mr Lim’s personal fortune at US$665 million, but even that only places the 59-year-old at number 13 on its ‘Malaysia’s 40 Richest’list for 2011. The key challenge for Mr Lim and his management team in thenext 12monthswill be to try and make the most of the insights that—in theory at least—they have with the company’s Singapore casino customers via shared culture and in many cases shared language. By the time of the dawn of the Year of the Dragon next January—the eve of Resorts World Sentosa’s second birthday— we may have a better idea of how successful they have been. 4 (4) Steve Wynn Chairman and CEO Wynn Resorts This month, Wynn Macau celebrates its fifth anniversary. And its creator Steve Wynn has learned a lot in that time about the Chinese way of doing business. One of those lessons is the network of obligation—of favours done and favours received—which is common tomost cultures but is formalised as standard operating procedure in this part of the world. Mr Wynn has also learned that it must be practised in such a way that it never for amoment looks like direct pressure being applied by either party. Tothatend,MrWynnrecentlyannounced a HK$1 billion (US$128.3 million) donation to the University of Macau Development Fund. The money will presumably help the educational institution open its planned new campus in the People’s Republic of China on Hengqin Island—located a thin stretch of water away from Cotai, where the mass-market end of Macau casino gaming is now focused. There lies the answer to Mr Wynn’s largesse. As with most charitable donations from business in most communities, pure altruism is rarely the only goal. And to put the donation in the context of the red hot Macau gaming market, it represents less than 20% of Wynn Macau’s net revenues in a single quarter—2Q 2011—and it’s spread over 11 years. There are sound and very Chinese reasons for spinning out the love over such an extended period. Mr Wynn badly wants to get going with his Wynn Cotai project and is under some pressure from the investment community to do so, despite the generally glowing school report Mr Wynn gained from analysts after his company’s 2Q results. But his original ambition,announcedinJune2010,foraCotai opening in 2014 looks like a distant dream because of political and logistical issues in Macau that are outside his control—namely the government’s desire to control the growth of the market and its unwillingness to operate an open door policy for imported labour in construction and hospitality in a market that is already statistically at full employment. And Sands China is (theoretically) ahead of Mr Wynn in the queue for Cotai construction labour so that Sands can finish its massive Cotai 5 and 6 projects. The Macau government—with the apparent backing of Beijing—is also distinctly lukewarm about allowing the casino market to grow too big too quickly. A year-on-year growth rate in gross gaming revenue in the high 40s of percent is quite big enough to be getting on with, thank you very much, seems to be the authorities’ position. And there’s also the small matter of getting the Cotai land currently earmarked for the Wynn Cotai project actually gazetted for gaming. In the past, such gazetting of September 2011 | INSIDE ASIAN GAMING 15