Inside Asian Gaming

December 2011 | INSIDE ASIAN GAMING 35 Feature grocery vouchers are very popular forms of loyalty reward with downmarket customers. Among more affluent slot players in the smarter casinos, high-value, high-status consumer goods such as cognac and iPads are the preferred type of player rewards. Machine play accounts for under 5% of gaming revenue in Macau, compared to around 60% of gaming revenue in Las Vegas. There were 15,900 slots and EGMs across Macau’s 34 casinos as of the end of the third quarter, according to figures from Macau’s gaming regulator, the Gaming Inspection and Coordination Bureau (DICJ). In 2010, Macau’s then total of 14,050 machines generated MOP8.62 billion (US$1.07 billion) in revenue. During the same period, Clark County, including the Las Vegas Strip, had 197,144 electronic machines—more than 12 times as many as Macau—distributed across 1,700 licensed gambling premises. They generated revenues of US$6.6 billion, according to the Nevada Gaming Control Board. In other words, Las Vegas had 12 times as many machines as Macau in 2010, but they were only generating six times as much revenue as Macau. Even though playing slots is still a minority pursuit in Macau, it seems that those that do play, play hard and play to win. It’s possible that with no new Macau property openings in the fourth quarter of 2011 that the number of slot machines in the territory may actually fall slightly from 3Q levels. That’s because Wynn Macau removed more machines from its main floor in early October to make way for Megstar—yet another VIP baccarat junket operation. The current soaring growth of the live table market in general and the VIP segment inparticularmakeitcommerciallyimpossible for operators to ignore that consumer demand. But slots are still Macau’s biggest revenue generators after live baccarat. They were good—as mentioned— for US$1.07 billion market-wide in 2010. Given the turbo-charged 47.5% year-on- year growth in Macau live table baccarat revenue to the end of September, slots have actually performed strongly in 2011. By the end of 3Q 2011, aggregate slot revenue had reached MOP8.38 billion (US$1.04 billion). That was nearly as much as for the whole of 2010 and a 34.9% increase year-on-year on the revenue achieved in the first three quarters of 2010. Average daily win per device in Macau ended last year at a respectable US$210, stacking up favourably with comparisons to a machine-centric day-trip market such as Atlantic City (US$241) and the Las Vegas Strip (US$159). The Venetian Macao’s 2,057 slots had an average daily win per device of US$303 in the third quarter of this year while Sands Macao managed US$280 per unit per day from 1,109 slots and The Plaza managed a whopping US$766 per machine per day—admittedly from a small universe of 182 slots catering for a mainly VIP audience. The real slot performer for Las Vegas Sands Corp as a group, however, was Marina Bay Sands in Singapore. Its 2,416 machines achieved win per unit per day of US$662 during the third quarter. VII. Rating the Tables Singapore’s Casino Regulatory Authority hasn’t licensed any junket operators to date, but it’s possible it will. Some observers believe international VIP play will soar once it does. An immediate revenue bump of 30% is possible, according to some. The importance of the high end is acknowledged at policy level by the Singapore authorities in their decision to institute a lower tax rate on revenue from so-called “premium play” (play involving check-ins of S$100,000 and up). The effective tax rate on VIP play in the Lion City is 12% (5% gaming tax plus 7% Goods & Services Tax) versus 22% on the mass (15% gaming tax plus 7% GST). There’s a statutory ban on issuing Singaporeans with credit for gambling in the mass market— but Singaporean citizens and permanent residents who are high rollers are exempted from the provisions. Even without junkets, things are progressing nicely in Singapore. Rolling chip (i.e. VIP) volume at Las Vegas Sands Corp’s Marina Bay Sands was a record US$16.72 billion in the third quarter. That compares to the US$24.77 billion rolling chip volume achieved by Sands China in the same period across three Macau properties Tigerish—Macau and Singapore slots are holding their own despite the phenomenal growth of table play Major improvement—Macau’s slot offer is light years ahead of that in the STDMmonopoly era