Inside Asian Gaming

INSIDE ASIAN GAMING | February 2013 38 FEATURES economic development or even all of the above? Before policy makers issue requests for proposals that demand billions of dollars in minimum capital investment and millions of dollars in licensing application fees, they must first establish clear and realistic economic goals; the operative term being “realistic.”To do this theymust first determine their market’s gaming revenue potential. Then they must determine the number of non-gaming amenities that the market can support given its location, transportation infrastructure and proximity to regional population centers. Only then can they begin to define their overall economic goals. 7. Let Citizens Gamble Gamingpolicymakers often viewcasinos solely as tools for tourismgrowth and limit or prohibit their citizens from enjoying gaming entertainment in a safe, comfortable and well-regulated environment. They seek to protect their citizens from the temptation of casino gambling. The reality is that people throughout the world enjoy wagering and they are going to do so, whether or not it is permitted by law. When a government prohibits its citizens from entering casinos, it forces those citizens to patronize unlicensed, unregulated, illegal gaming venues. Furthermore, a policy barring locals from entering casinos and restricting access to foreign patrons limits the economic potential of those casinos. Las Vegas grew to be the entertainment destination it is today not by banning US citizens or local residents from wagering, but by providing a safe, attractive and exciting venue for those citizens. Had public policy only allowed foreign visitors to wager, Las Vegas would have never grown beyond a small town in the middle of the Mojave Desert. Singapore chose an alternative approach, limiting residents’ access to its casinos by charging a S$100 (US$81) entrance fee. While some may view the fee as nothing more than a 100% tax on the first $100 of wagers which fails to discourage problem gamblers from visiting, no one can doubt the overall success of the Singapore model. Some gaming policymakers believe they can replicate the Las Vegas and Singapore casinodevelopmentmodelwhilecompletely barring access to its citizens. They are mistaken. In order tomaximize the economic benefits generated by gaming venues within their jurisdictions, government must allow access to their citizens. There are numerous examples of gaming developments in Asia that never reached their true potential because of a flawed paternalistic policy, the most notable example being South Korea, where 16 of the country’s 17 casinos are off limits to locals. These foreigner-only casinos provide a modest number of jobs, induced a relatively small amount of capital investment and enriched a few operators, but they failed to replicate the Singapore, Las Vegas and Macau models. Rest assured, the citizens of Seoul and Busan are gambling today, just not at state-sanctioned venues. Andrew Klebanow is principal of Gaming Market Advisors. He can be reached at andrew@gamingmarketadvisors.com . Las Vegas grew to be the entertainment destination it is today not by banning US citizens or local residents from wagering, but by providing a safe, attractive and exciting venue for those citizens. Had public policy only allowed foreign visitors to wager, Las Vegas would have never grown beyond a small town in the middle of the Mojave Desert.