Boom time for Macau gaming industry


IN the ferry that plied from Hong Kong to Macau, a middle-aged passenger was telling her friends she had switched to another casino that was offering patrons a free meal and low hotel room rate in addition to shuttle bus service and free vouchers. 

“It is worth going there. You could at least enjoy free lunch or dinner even though you may not need the hotel room,” the woman explained. 

Each day there are thousands of visitors like this lady and her peers from Hong Kong or China making day trips to Macau, some going on a daily frequency. 

Last year, Macau received over 18 million visitors, of which nearly two-thirds were from China.  

The number of Chinese tourists visiting Macau has surged since 2002 when China began to loosen the travelling restrictions on its people to visit the two special administrative regions (SAR) – Hong Kong and Macau. 

“The relaxation of China’s travelling policy helps to boost tourist arrivals in Macau,” said Macau Tourism Board director Joao Manuel Costa Antunes in an interview with StarBiz

Currently people in 50 Chinese cities are permitted to travel to Hong Kong and Macau. 

Besides good food and centuries-old historical sites, casino is no doubt the big magnet for tourists to this former Portuguese colony that borders southern China’s Guangdong province and a strait apart from Hong Kong.  

Baccarat, roulette, the Chinese games like fan tan and pai kao (dominos), slot machines and more – you name it, you have it in 21 casinos operating round the clock. 

Casino Lisboa is a major landmark in Macau

Not only that. There are also horse racing, greyhound racing, football betting and a variety of lottery games.  

It is just like a paradise for quick bucks. 

Gaming industry has been rooted in Macau for 120 years.  

“There are families who have worked in the casinos for seven generations,” he said. 

But the booms and waves of change in this over 100-year-old industry were never this strong before.  

Gaming revenue has more than doubled in the past four years. It soared to US$5.6bil last year from US$2.5bil in 2001. Casinos accounted for 97% of it.  

In the first quarter of this year, gross revenue of casinos went up 15% year-on-year to US$1.6bil, according to Macau’s Finance Service Bureau.  

Casinos are paying a 35% direct tax. So, imagine how Macau government’s coffers have expanded in recent years.  

Official statistics show that tax revenue from the gaming sector leaped to US$2.25bil last year from US$1bil in 2002. 

Macau, whose size is only one-tenth of Kuala Lumpur's, is now evolving fast into the world’s biggest resort city. It is expected to overtake, if it hasn't yet, Las Vegas in terms of revenue and number of visitors. 

Yes, people are comparing Macau, which used to be a backwater place with casinos that seemed to be overdue for renovations, with Las Vegas – the well-known vibrant US gaming city that is bustling, full of glitz and luxuries.  

Casino operators like Wynn Resorts, Las Vegas Sands and MGM Mirage, which had turned the former cowboy town into what Las Vegas is today, are now pouring in billions to do the same in Macau. 

Nonetheless, this would not have happened without the government’s bold decision to liberalise its casino industry. 

When Stanley Ho’s casino licence expired in 2002, it opened up the window of opportunity for the authorities to end the tycoon’s 40-year-old monopoly in the casino business.  

That marked the beginning of a new chapter in Macau’s casino business. 

Nasdaq-listed Wynn’s Company and Hong Kong-based Galaxy Resort & Casino each won the bid for two of three licences that granted them the concession to operate more than one gaming property in Macau.  

The other licence went to incumbent Ho, who owns 16 of the 21 casinos in Macau. 

Joao said the liberalisation not only brought in lots of foreign investment to Macau, but also “different practises of casino management.” 

“In hindsight, the liberalisation has improved the overall offerings in Macau’s casinos. There are more upmarket brands now,” said Melco International Development Ltd chief executive officer cum chairman Lawrence Ho, son of Stanley Ho. 

“Everyone wants to outdo the others. So services improve,” he told an investment forum in Macau. 

Sands, which has spacious gaming floor, live shows and a private club that comes complete with spa and wine cellar, is the first foreign-owned casino that opened after the liberalisation.  

The odds of winning a fortune may be the same in all casinos, but Sands offers a “new” experience for its visitors.  

It isn’t just new furnishings, but also the atmosphere. Tourists would not feel like being in an underground smoky illegal casino as they did elsewhere before. 

“Sands opens up a new market segment,” said Vanessa Fan, managing director of Emperor Group in the investment forum’s panel discussion. Emperor Group owns a casino in Macau.  

Fan noted that hardcore gamblers were main casino visitors previously. “Now we see more ‘tourist gamblers’ in Macau,” she added. 

Given the big population and the rising affluence in China, casino owners seem to have bet their bottom dollar on a bright prospect for Macau’s gaming business. 

“There are 1.3 billion people living within three hours' flight from Macau. And 100 million people within the radius of a three-hour drive. 

“Nowhere else in the world has (a casino) such an advantage, not even in Las Vegas or Australia,” said Lawrence, whose company had formed a joint venture with an Aussie firm Publishing and Broadcasting Ltd to build an underwater casino. 

Related Stories:Thriving beyond expectations Tourism board to promote city as MICE centre for Asia Las Vegas Sands gets nine proposals for US$1bil loan 

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