Inside Asian Gaming

inside asian gaming May 2016 38 The transition is anything but normal and it will not be accomplished with a wait-and-see attitude. On the contrary, it’s a long-term vision needing a major effort from both government and businesses alike. The new normal is indeed a comfortable, cozy place to be. It moderates expectations, it justifies underachievement and, even better, it provides all answers to all problems. This is it. There is nothing more. Just relax and enjoy the perks of fatalism. According to the new normal, Macau gaming revenue will never again be in the worlds’ headlines for the best of reasons, those days are long gone. At best it will bottom-out sometime this year, we hope. The causes have been found and we are not to blame. We are just the victims of a lost bullet in Beijing’s fight against corruption. If we lay low, click our heels three times and say to ourselves “Macau is a world-class tourism destination,” the storm will pass, the individual visitor scheme will be expanded, and we will be able to go about our lives. And, hey, we are still making four times more revenue than Vegas, right? I am a firm believer in the benefits that come with the change of Macau’s paradigm from a VIP gaming haven to a mass-focused entertainment destination. When that shift is completed, I am confident that Macau will be a better place to live, visit and do business in. There will be less volatility, less exposure to criminal activities and a more diversified client base that will hopefully encompass individuals and families from all across Asia. The transition, however, is anything but normal and it will not be accomplished with a wait- and-see attitude. On the contrary, it’s a long-term vision needing a major effort from both government and businesses alike. It will take better infrastructure, catchier destination marketing campaigns, specialized training, better quality of service, affordable flights from farther locations and jaw-dropping entertainment attractions. When all of these are in place more visitors will come, they will bring their families, stay longer and therefore spend more and they may even want to return. At that moment, Macau will see its tourism revenues go up, in a healthy, sustainable manner, and we will laugh at the days when we used to track gaming revenues like the be all and end all of the Macau economy. But will we really? According to the Five-Year Development Plan released by the Macau government late last month, the SAR’s goal is to increase overall revenues from the concessionaires’ non-gaming sales to 9% of gross gaming revenues by 2020 (from a reported 6.6% in 2014). That only represents an annual growth objective of 0.4% vis-a-vis gaming revenue. Experts say that the non-gaming segment is a crowd puller but overall, a margin drag. And, if we are to rely on the Macau Government’s figures it is also not a very strong revenue generator. At least not in Macau, at least not in the coming five years. The last game of chance to be added to Macau’s permitted list was the Asian version of Two Up, a popular game among Australian soldiers in the First World War. The question remains however, as to what Macau is doing to make sure that the new tourists it expects to attract will be spending enough money during their visit. How, if not through non- gaming sales, is Macau planning to return to a path of growth rooted in the mass-market? Is Macau making sure its gaming offering will appeal to tomorrow’s mass consumer? Whether or not you agree with their approach, it is noticeable that both the public and the private sector have been actively striving to put in place the fundamentals of a mass-market entertainment destination. The question remains however, as to what Macau is doing to make sure that the new tourists it expects to attract will be spending enough money during their visit. How, if not through non- gaming sales, is Macau planning to return to a path of growth rooted in the mass-market? What is the macro strategy that will see the five very large properties expected to come online in the near future become sustainable, employment generating business ventures? Is Macau losing sight of its core business while focusing on building around it? In a nutshell, is Macau making sure that its gaming offering will appeal to tomorrow’s mass consumer? In truth, the game here is changing, even while the ones you play are still the same. If you take a moment to look at the gaming offering in the world around us, you will soon realize that a lot has happened in the past few years. From Fantasy League to camel races in Alice Springs, you may now place bets on pretty much anything, at anytime, from any possible device with internet access. All of this while SLOT, the local monopoly sports betting operator, is only allowed to offer the exact same products it was authorized to launch more than 15 years ago – bets on football and basketball. To bet on Rules of the game