Inside Asian Gaming

14 Macau currently lacks regulations covering its rapidly growing gam- ing machine market. According to Jorge Oliveira, the man charged with drafting Macau’s gaming laws, gaming machine regulation will need to cover “who can sell, if you need to be licensed, if the equip- ment needs to be certified.Who can touch the machines.These kinds of things.” The machine manufacturers are also calling on the Macau gov- ernment to allow them to share revenue with casinos on the ma- chines they install. Mr. Oliveira feels this would distort the working of the market. “We want the machines to come because the operators here want to invest in machines. Casinos may put machines in without invest- ment by offering profit share to the manufacturers.” Mr. Oliveira wants more gaming machines in Macau, and he be- lieves the best way to achieve that is to liberalise the gamingmachine market to allow hotels and other non-Casino venues to install them. He believes failing to liberalise the market will lead to under-invest- ment and open the door to a significant threat to Macau. “You may have very soon in Hong Kong the idea that they should start to le- galise casinos by legalising machines.” He argues it would be hard to argue for the protection of Macau’s gaming machine market because the city currently has so few machines. Regulating the Explosion But what of the view that Macau casino operators will in coming years create vast halls of gaming machines, particularly on Cotai? “Casino operators sell the idea that they are going to invest a lot in machines. But common sense dictates otherwise. Tables make US$5,500 per day, and even if that falls to US$4,000,” will still offer much better returns for casinos than machines, which currently make around US$300 per day. “Sands is closing its restaurants to put in more tables. Wynn Ma- cau [set to open in September] will have 20,000 sq.m of casino space. And you know how many machines they will have in 20,000 sq. m? Three hundred something.Those are almost like artificial plants.They are decorative elements.” By seeking to maintain their exclusive right to operate gaming ma- chines,Mr.Oliveira believes the newcasino operators will only strength- en the position of Melco International Development,which is the main organisation in Macau currently investing in machines. “Because the group with which they are associated, STDM [parent company of Stan- ley Ho’s SJM],has a lot of gaming floor available.STDM is the largest real estate company inMacau,and they can have a lot of gaming floor avail- able.If they have an unlimited gaming floor,it makes sense that they try to drive the competition out by reserving a part of that for machines. The current system only benefits Melco, at the end of the day.” A Mocha Slot outlet