Headline, March11, 2014


 O' O" OH^"' MACAU "'

BETWEEN 2008 and 2012 Macau's gambling revenues grew by  29%  a year on average. Now, no other casino venue comes close:

Macau's rise to the top of the gambling league is part of a broader shift in this  $160 billion a year global industry.

As recently as  2010  the United States  made up nearly half of the global gambling market by revenue, while the Asia Pacific region made up only about 30%.

PWC, a consultancy, reckons that by 2015 the latter will be the biggest market.

Macau's rise owes much to a collision of geography, history and Communist dogma. Chinese love to gamble, but the government has long forbidden casinos on the mainland.

It did, however, let them continue to operate in Macau after the Portuguese handed over the sovereignty in 1999. Macau, like its close neighbour Hong Kong, has a degree of legal autonomy and is just a few hours flying time or less from a  billion potential punters.   

Even so, Macau's spectacular growth was due not to mass tourism,  as in Las Vegas,  but to its success in attracting  "high rollers". This is in large part because, unlike heavily regulated casinos in America:

Casino firms in Macau do not ask too many questions about who these big spenders are or where they get their money?!

MACAU may have bested faraway Vegas, but its dominance is now being challenged by rivals in its own backyard.

Singapore's two newish casinos have, in just a few years, become among the most successful in the world, in part by poaching some of Macau's best customers.

More troubling for the Macanese operators, ambitious new projects are now popping up everywhere in the region, from Japan to the Philippines and Australia to the Russian far east.

The billionaire developers and politicians behind these ventures all believe they can lure Chinese high-rollers away from the territory.

Michael French, chief operating officer of the Solaire, the first of four casinos to open in Manila's new Entertainment City, recently claimed that "if we can get 7% of Macau business to come here, we achieve our goals for the market."

Frigid Vladivostok may seem like an unlikely threat, but its aspiring casino-builders point out that it requires less time for a high-roller in Beijing to fly there than to steam Macau.

Big betters from the mainland have clearly played an important role in fuelling Macau's past growth. Even today they make up 60--65% of the revenues of its large casinos.

So could the poaching of high-rollers take the wind out of Macau's sails?

In fact there are several reasons to think that Macau's brightest days may still lie ahead. The most important is that unlikely rival destinations, which must be typically reached by air from China:

Macau's physical attachment to the mainland means it can be easily and cheaply reached by land. So it has an alternative to the high-flyers: the mass market.

Low-rollers from the neighbouring Guangdong province have long come to Macau, usually on day trips. Indeed, the average visitor to the territory still stays less than two days, whereas in Las Vegas the norm is closer to a week.

The great unwashed may seem an unattractive market compared with the monied elite, but here is the surprise : low-rollers bring in more profits.

That is because enticing high-rollers involves enormous subsidies, ranging from fancy suites and champagne to less savoury perks, whereas ordinary punters get none.

So even though VIPS still make up most of the revenue of Macau's big casinos, it is the mass market that delivers the majority of the profits.

"Ah, Macau has an Ace in the hole!!"

The delight and the fun of the Post continues periodically in the future:

With respectful dedication to the Students Professors and Teachers of Asia. See Ya all on   !WOW!     -the World Students Society Computers-Internet-Wireless:

''' Hitting The Jackpot "'

Good Night & God Bless!

SAM Daily Times - the Voice of the Voiceless


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