Inside Asian Gaming

inside asian gaming MAY 2015 42 Sands China has been well ahead of the curve in bringing entertainment to Macau. Although the company derives tremendous value beyond the ticket sales from staging big-budget extravaganzas, no event gets the go- ahead unless it’s deemed financially viable on a standalone basis, as Senior Vice President of Marketing Scott Messinger explains Insights I n the 1950s and ‘60s, Frank Sinatra and the other members of the legendary Rat Pack performed regularly on small stages and at dinner theaters in Las Vegas casino hotels. Tickets to the shows, often including a sumptuous multi-course meal, were either given away or priced far below break-even level. The casinos bore the cost as a means to draw gamblers. As the years went by, the approach to entertainment shifted under new ownership. The Rat Pack era coincided with the height of mafia involvement in Las Vegas, then from the end of the ‘60s the mob was driven out and replaced by public corporations intent on ensuring transparency and generating shareholder value. Another factor was the emergence of destination-scale resorts that drew a new breed of visitor in search of a more diverse experience to that offered by the casino hotels of old. By the ‘90s, the concept of entertainment in Las Vegas had been transformed. “Yesterday’s loss leaders have become today’s profit centers,” remarked a 1997 Wall Street Journal article describing the entertainment scene on the Strip. It’s the concept Sands China brought to Macau. So although entertainment spectacles such as this month’s Katy Perry concert at The Venetian Macao’s Cotai Arena provide huge marketing value as well as a revenue boost to the property’s casino and other departments, the approval of any such event must begin with an assessment of its financial viability on a standalone basis. “Because obviously we’re a public company,” notes Sands China Senior Vice President of Marketing Scott Messinger. “We don’t want to actively lose money on the event itself. We can’t, for example, say Katy Perry is going to attract a lot of our casino customers, so we’ll factor in what the increase in casino win will be, and say it’s OK if we lose a bit of money on the show because we’ll make it up in the casino. But internally we do produce models that suggest what we think the impact on gaming will be. More importantly, what we think the ancillary lift will be on the property, whether it be in terms of hotel sales, F&B and retail.” Among major non-gaming departments, retail is a standout for Sands China, with over 650 duty free shops across its Cotai properties—including The Shoppes at Four Seasons, ranked the The big wins for Sands China are the broadcast events from the property, such as the Showdown at Sands boxing tournament, seen by millions of viewers in China and beyond. The Best is Yet to Come