With some analysts predicting a year on year fall in VIP baccarat revenue of 15 percent or more in Macau in the first half of 2009 this could be the moment that poker—and specifically Texas Hold’em poker—comes of age in the casino territory.
Now the Asian Poker Tour (APT) says it has been given approval by Macau’s gaming regulator, the Gaming Inspection and Coordination Bureau, to expand the Macau leg of its tournament from six days to 12. The APT Macau Festival will run from 12th to 23rd August at the Galaxy StarWorld Hotel and Casino. The buy-in is set at USD4,300 (USD4000+300).
The organisers add they will also offer high-limit games and ‘sit-n-go tables’ during the festival, hinting they will up the ante on last year’s HKD1 million (USD129,000) high rollers game.
PokerStars.net, the online company that supplies players to another land-based tournament—the Asia Pacific Poker Tour (APPT)—recently opened a 22-table poker room at SJM Holdings’ Grand Lisboa.
In the boom times of the first half of 2008, when baccarat tables in the high roller and mass market sectors were packed with punters, casino managers saw poker as interesting, but essentially a niche product. Now it looks as though it could be a valuable driver not only of gaming revenue but of complementary spending on high value services such as luxury hotel rooms and fancy restaurant meals.
This is because the players are not just well-heeled foreigners flown in for high profile, big prize tournaments, but locals from juicy A and B demographics that are already playing the game socially on Friday nights in upscale restaurants in Hong Kong.
After their unhappy experience of what table oversupply did in a downward market in late 2008 in fragmenting and cannibalising the VIP baccarat sector, Macau casino operators and the local regulator will need to tread carefully to ensure poker market growth and table capacity don’t get too out of balance.
Gross revenues from Texas Hold’em rose 400 percent in the space of just a year in 2008—from four million patacas in the first quarter, when SJM Holdings opened a four table room at the Grand Lisboa, to 20 million patacas after a flurry of room openings in the middle and second half of the year, taking the total revenue for the year to 54 million patacas. This is miniscule (rather than simply small) potatoes, compared to the 73.7 billion patacas brought in by VIP baccarat in the same period, but it’s not bad from a standing start. And a more telling analysis might be to see what impact, if any, poker rooms and poker tournaments have had on complementary revenues at the venues hosting poker games.
Macau operators first dipped their toes in the poker ‘pool’ in 2007 by installing a few poker machines. Since the APPT held its groundbreaking tournament at Galaxy Entertainment Group’s Grand Waldo casino in November that year, the market has grown dramatically.
From a casino operators’ perspective, the beauty of sub-letting a room for poker to a third party promoter is that it can be done on a guaranteed income basis, offering valuable liquidity on fixed assets at a time when tables and rooms normally given over to baccarat might otherwise be sitting idle.
The four poker tables at SJM Holdings’ Grand Lisboa managed to generate four million patacas in revenue in just two months after they were launched in February 2008—and that was during the baccarat boom times.
Then in May 2008, PokerStars.com, the online casino company that supplies players for the APPT events, upped the ante when it launched its own poker room at the Grand Waldo casino with 16 tables. It helped push up Texas Hold’em revenue during the second quarter of last year to 11 million patacas.
This was followed at the end of July by the opening of a cash play poker room at Galaxy’s StarWorld Casino managed by London-listed AsianLogic, a provider of online and land based gaming services. AsianLogic followed that up in August by hosting the first APT event at StarWorld. AsianLogic had purchased the rights to the APT from a Singapore company in March that year. The Macau leg featured world famous players including Doyle Brunson and a guaranteed prize pool of USD1.5 million—a record for a Macau poker tournament.
Wynn Macau bought into the poker boom in November by launching its own eight-table poker room. The pie kept growing, too, with Texas revenue during the fourth quarter climbing to 20 million.
PokerStars closed down its room at the Grand Waldo a few months back and last week opened a new 22-table poker room on the second floor of the Grand Lisboa, launching with a HKD10,000 buy-in tournament and a guaranteed HKD500,000 prize pool.
Watch this space to see whether poker boom turns into poker war in the coming months.
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