Inside Asian Gaming

INSIDE ASIAN GAMING | May 2012 10 dominates the market that its growth and that of the total market tend to track each other almost perfectly. Since 2004, VIP baccarat revenue has grown 558%. The annualized growth of overall revenue and VIP, 26.3% and 26.6%, respectively, reflect the same phenomenon. Slot revenues, on the other hand, have outpaced the growth of the total market on a percentage basis by 3 to 1. Whereas VIP revenue has grown fivefold, and mass-market tables sevenfold, slot revenue has grown sixteenfold. “There’s certainly been a change, I believe, from how it was in the beginning,” says Ken Jolly, vice president-Asia for ShuffleMaster Asia. Mr Jolly, who helped open the market with Aristocrat in 2004-05, recalls: “One of the comments in the early days that we used to hear was the Chinese player won’t trust a machine. They want to play live games. They want to play against the dealer, where they can believe through some superstition or power that they’ve got control. I think a lot of that has gone away now.” Credit the advent of a larger and more expansiveWestern resort model. Then factor in sheer numbers: mainly the soaring rate of Chinese outbound tourism post-IVS. Figures compiled by the Macau government’s StatisticsandCensusServiceshowtheimpact of the IVS. Same-day visitor arrivals jumped 68% between 2002 and 2004—which, not coincidently, was the first year that same- day visits from Mainland China exceeded those from Hong Kong, a pattern that has been repeated every year since. From 17 million total visits in 2004, same-day and overnight, the city experienced 28 million in 2011. Of those, 58% were Chinese from the Mainland. “Probably people are starting to get used to the games, because some of these people, particularly the Mainland Chinese, hadn’t seen a slot machine,” says Mr Jolly. “They didn’t really know how they worked. Now they’re feeling more comfortable because they may have been here once before, or twice before. There seems to be more of a community of people learning about new games.” “There is a real slot player in the region now. There is a real slot player coming from Mainland China and from Hong Kong, and this is greater than what we all thought originally from a tables perspective. There’s a market there. There’s a player there.” Of course, there are also a lot more machines out there, more than 16,000. There were 2,250 at the end of 2004. The product came up to snuff, too, and very quickly, and it’s impossible to overstate the impact of that as well. “Right to 10 lines, 20 lines, just like that, feature-rich games,” says Andy Crisafi, vice president of operations at Weike Management Macau, which runs a number of slot floors around town under third-party agreements with concessionaire SJM. “In Australia and the States, you know, there was a gradual progression, from one-line games to three lines to five lines, and so on. Not here.” Factor out language and some of the themes, and not only is there very little that separates Macau’s slot floors from any you’d see in the States, in some cases they’re more advanced. “There is a real slot player in the region now,” says David Punter, general manager Asia Pacific for Aristocrat. “There is a real slot player coming from Mainland China and Cover Story Machine games generated 4.5% of GGR in 2011—good for US$1.43 billion Casino Gaming Numbers & Revenues ( MOP millions) Year Casinos Gaming Tables Slot Machines Total Revenues Revenues ($USD) 2002 11 339 808 22,180 $2,772.50 2003 11 424 814 28,672 $3,584.00 2004 15 1,092 2,254 41,378 $5,172.25 2005 17 1,388 3,421 46,047 $5,755.87 2006 24 2,762 6,546 56,623 $7,077.87 2007 28 4,375 13,267 83,022 $10,377.75 2008 31 4,017 11,856 108,772 $13,596.50 2009 33 4,770 14,363 119,369 $14,921.13 2010 33 4,791 14,450 188,343 $23,542.86 2011 34 5,302 16,056 267,867 $33,483.38 Source: Center for Gaming Research, University of Nevada, Las Vegas