The CEO and President of MGM Resorts, Bill Hornbuckle, said Friday that a recent move by other Macau casino operators to implement RFID technology to better track play on their gaming floors was at least in part due to the failure of foreigner-only gambling zones to gain traction with players.
The idea of gaming ones being established exclusively for the use of players from outside of Greater China was first mooted by the Macau government in late 2022 as a means of determining the amount of revenue generated by foreign passport holders. The measure formed part of a newly introduced administrative regulation at that time that sets out the rules for a potential reduction in the tax rate charged on gross gaming revenues (GGR), with the government having stated concessionaires could receive a tax break of up to 5% for increasing foreign visitation.
Chief Executive Ho Iat Seng later revealed that 12 foreigner-only zones had been set up in Macau casinos as of April 2023.
However, Hornbuckle said the experiment with foreigner-only zones didn’t work, with MGM instead relying on chip tracking technology to determine foreigner-play.
“We put in a ‘chip in chip’ program several years ago where basically every chip is tracked, and the benefit at the time was no errors to the game, you knew exactly where to put your labor, there were a bunch of back-end benefits as well in terms of accounting and financing, and it was meaningful,” Hornbuckle said during an appearance at the J.P. Morgan Gaming, Lodging, Restaurant & Leisure Management Access Forum on Friday (Asia time).
“When the new regs came out and the market place was asking for international business outside of Greater China – Hong Kong, Taiwan and mainland China – the only way to track that effectively, because it was a different tax bracket, was to put [the international business] in independent private rooms. That means everyone from Thailand has to go over to a little room and gamble.
“The customers didn’t like it, but the one thing the ‘chip in chip’ enabled us to do, and we got a huge headstart on this, was let people go anywhere they want in the casino because we can track their every move and their every play.
“Mr Jones can go anywhere and we can track his every play, which is a huge advantage because customers do not want to be isolated.”
According to a recent report by Goldman Sachs, at least three other concessionaires – Galaxy Entertainment Group, Melco Resorts and SJM Resorts – will introduce RFID technology to track their chips within 2024, while Sands China and Wynn Macau are reviewing the concept.
Hornbuckle noted that Macau’s gaming regulator, the Gaming Inspection and Coordination Bureau (DICJ), was highly supportive of such technology.
“They enjoy it and they love it because they can see it, they can understand it,” he said. “It’s truly trackable and you can see that others are now trying to see how quickly they can get to the same technology.”
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