Inside Asian Gaming

September 2015 inside asian gaming 65 Macao, in 2004, the monopoly-era customers came mainly from Hong Kong and Taiwan, whereas the overwhelming majority since then have hailed from mainland China. The turning point was not the opening of Sands, but rather, Beijing’s easing of travel restrictions on its citizens wishing to visit Hong Kong and Macau starting from the second half of 2003—a happy coincidence for Sands, which, upon opening its doors, was deluged with decades of pent-up gaming demand from the mainland Chinese hordes that subsequently descended on Macau, the only part of China where casinos are legal. Though mainlanders have become the demographic most coveted by international casino developers, they’ve only really had access to gaming for a little over a decade. If Nevada’s experience is any guide, as Macau’s gaming market matures, EGMs will become more prominent in the revenue mix. They’ll also become more prominent on the casino floor, with the upcoming wave of new resorts on Cotai destined to contain a greater proportion of EGMs relative to tables as a consequence of both the local government’s citywide cap on the number of gaming tables and the need to adjust to the market’s inexorable shift away from the VIP segment towards the mass. Cost and efficiency considerations are also important, with machines providing the only viable means to generate marginal revenue from players currently priced out by the lofty minimum bets at Macau’s tables or those who might not be very keen on gambling, but are willing to spend a little money on something positioned more as an entertainment option. Another trend in mature gaming markets such as Las Vegas is a declining interest in gaming among younger generations, who prefer to spend their money on non-gaming entertainment. The younger cohort among China’s middle class—a group who are just now coming of age and will gradually supplant the preceding generation as the country’s dominant consumers—are proving especially westernized in their tastes and outlook. Apart from the well-documented causes of Macau’s current malaise, from China’s Cost and efficiency considerations are also important, with machines providing the only viable means to generate marginal revenue from players currently priced out by the lofty minimum bets at Macau’s tables or those who might not be very keen on gambling, but are willing to spend a little money on something positioned more as an entertainment option. Tech Talk