Inside Asian Gaming

January 2016 inside asian gaming 37 the rapidly evolving dynamic of Macau remains to be seen, but this action does point out that it is not just the analysts and investors who have gotten nervous. Confidence or crisis? Confidence in Macau readily arises from the amazing successes achieved to date. It is a tiny city-state that has quickly transformed from a sleepy backwater into a thriving entertainment center with billions being invested in magnificent resort developments. It has gaming revenues that continue to outstrip even the most bullish analyst estimates. Macau’s visitor numbers continue to surprise and astound observers. There is no crisis yet — but the emerging issues discussed above should not be overlooked. Turbulence and headwinds may very well characterize Macau’s competition in the short term and disturb the surprisingly positive trends that have emerged to date. However, there are increasing signs that the recent overexuberance in Macau’s prospects may indeed lead to disappointment for some investors, and disillusionment for policy makers. It may be time for greater caution, and to reflect upon what lessons may be learned from the congruence of factors presently swirling around Macau. Indeed, Chief Executive Ho’s directives suggest that is likely to be the present course. In the long term, the burgeoning Chinese middle class will likely ensure Macau’s success, as long as the partners in Macau’s gaming industry — government, regulators, concessionaires and junket agents — all recognize and appropriately respond to the issues and challenges that arise. Reprinted with permission of Global Gaming Business . Cambodia or Myanmar (Burma) to gamble at the legal casinos in those jurisdictions. Now a new leader, Prime Minister Samak Sundaravej, has endorsed the idea of legalizing casinos. He said he would use the model currently in use in such jurisdictions as Malaysia, Macau and Singapore, and that casinos would be first introduced into resort areas, such as Phuket, which were hard hit from the Christmas tsunami several years ago, and are still recovering. Tourism has suffered and Samak hopes gaming can revive it. Opposition is strong in this traditionally Buddhist country. But Samak wants to use the revenues to aid tuition for Thai college students, which could mute the opponents to his plan. Sangsit Phiriyarangsan, a former National Legislative Assembly member who has supported legalized gaming in Thailand, said the “underground black money” should be brought to the surface and put to good use in a transparent and responsible manner. Gambling revenues in Thailand could be huge. An estimate of illegal gambling starts at 500 billion baht (US$12.8 billion) a year, of which perhaps 100 billion baht is net profit, according to an academic study completed in 2004. It will be up to the Thai people to decide whether gaming will be legal via a referendum, which needs to be established via legislative action. In the past, support for gaming has been mixed. The National Statistics Office conducted a nationwide poll of 5,800 people above the age of 18 in 2003 and found that only 30 percent of respondents support the decision of opening casinos, while 54 percent were opposed to the idea and 16 percent were undecided. A later Suan Dusit poll showed that 52 percent of people supported the idea while 32 percent were opposed. INDONESIA Eyeing the success that neighboring Malaysia has had with Genting Highlands, some legislators in Indonesia are talking about carving out a development zone on Bintan Island, about an hour by boat from Singapore. Malaysia’s Landmarks Bhd., backed by the leisure and gaming conglomerate Genting, has proposed a $3.1 billion gaming resort on the island. “The objective is to develop a new destination for Indonesia,” Chief Operating Officer Lim Boon Soon told Bloomberg. “The casino will accelerate the whole integrated development in Bintan.” As the largest Muslim nation in the world, opposition in Indonesia to a casino could be intense, but competition from Singapore, where Las Vegas Sands and Genting are building two multibillion-dollar casino resorts, could spur development in Bintan. The island is in the midst of a massive development as a “holiday resort,” with facilities that include the Banyan Tree Bintan, Bintan Lagoon Resort and Club Med Ria. Landmarks’ Treasure Bay will have will have as many as five resorts, condominiums, villas, health spas and water canals, with “minimal” casino space, according to Lim. GUAM Even though the people of Guam have spoken several times via referendums, soundly defeating casino or gaming of other kinds, some groups are continuing to push the idea. A new initiative has been launched to collect signatures to be on the general election ballot in November. It seeks voter approval for casino gaming at the Guam Greyhound Race Track. A previous initiative campaign for an almost identical idea failed when voters turned it down. But the constant return of gaming has led some legislators to propose a bill, in April, that would limit howmany times voters would need to decide any issue. Because voters have voted against gaming so many times, prospects for the current initiative drive look dim. VIETNAM The national policy on gaming in Vietnam currently pertains mainly to small gaming salons with a maximum of 100 slots (or gaming positions) in fivestar hotels, available ostensibly only to foreign passport holders. Several provinces are interested in stepping into the casino waters, and the government is considering a series of mega-casinos. As Vietnam enters the modern age, thousands of hotel rooms are being built in Hanoi, Ho Chi Minh City (Saigon), Danang and other cities. Major hotel companies are exploring the possibilities in Vietnam. Casino hotels have been proposed in Danang, Quang Nam and some offshore resort islands. Investment will begin at $1 billion, according to the experts on Vietnam. Without a specific legal framework, however, major U.S. gaming operators will not take a chance in Vietnam. Other impediments include poor aviation and transportation infrastructure, a lack of trained workers and no tourism tradition. Blast from the Past June 2008