Inside Asian Gaming

inside asian gaming March 2015 6 Coming of Age At the turn of the millennium, few imagined how influential Chinese consumers would soon become in global markets ranging from natural resources to luxury goods. Or that they’d become by far the most coveted customers of the world’s casino resort developers, for whom catering to the rapidly evolving tastes of China’s rising middle class—and especially the sophisticated younger cohort within it—will be critical to success. Fortunately, Macau’s developers appear headed in the right direction Cover Story I t’s become de rigueur for Macau’s casino operators to trumpet the extensive non-gaming attractions at their upcoming Cotai resorts. One reason for doing so is to publicly make a case for a generous allocation of gaming tables from the government, which has officially capped annual market-wide growth in the number of tables at 3%. Assuming the cap is enforced, the resorts scheduled to open between now and 2017 will get substantially fewer tables than their operators are hoping for. Melco Crown’s US$2.3 billion Studio City Macau, set to open mid-year, was built “with a capacity for 500 gaming tables,” according to the company’s co-chairman, Lawrence Ho, speaking at a media preview event for the resort in January. “But the truth of the matter is I have no idea how many tables we are going to get. That makes our faith in this market, and in the government, even more spectacular.” Noting the government’s policy of basing the allocation of tables to each operator on how much they have invested in non-gaming amenities, Mr Ho stressed that only 5% of Studio City’s completed space would be devoted to gambling. He added, however, that “In order to invest in non-gaming we need financing from gaming,” and said the company “hoped” Studio City will be granted as many as 400 tables when it opens. That may be too optimistic. ATTRACTING THE MIDDLE-CLASS MASS There’s more to the non-gaming mantra than table allocations, though. The operators have recognized their businesses will increasingly depend on the strength of their non-gaming offerings,