Inside Asian Gaming

Oct 2007 | INSIDE ASIAN GAMING 17 VIP Rooms in Focus the market finally force Sands to conform to what the customers want? Well, I revisited Sands recently,and found there was no differ- ence between the Paiza floor and the other Macau VIP Rooms operating under the SJM and Galaxy umbrellas. The Paiza suites had become, as one highly placed Sands execu- tive put it, “like Red Market” (an ageing wet market in the old part of Macau character- ized by slippery floors and the heady aroma of fresh fish, poultry and livestock). The place was festooned with used tissues, cigarette butts and half-eaten fruit, the elegant single- use cloth towels in the washrooms had been replaced by cheap tissues, and customers were wandering in and out in T-shirts and jeans.You get the picture. But the Paiza traffic and revenue figures have moved inversely to the level of luxury of the surroundings. I popped into the Paiza suites during the high-traffic opening night of the Vene- tian. Prior to opening, both Sands and Wynn had claimed they would cut out the junket middle man and pursue direct (and higher marin) business. In reality, both helped to further push up the prevailing junket com- mission rate in Macau. And if the new Paiza suites at the Venetian are any indication, it would appear that going after direct busi- ness is no longer in the business plan. Every VIP room at the Venetian has its own mini junket cages, just like those original rooms pioneered by Stanley Ho. Looking further in, you will see even more changes. Below the Paiza floor in Sands is the Premium club on the second floor, where main floor customers exhibiting higher potential than the mass were invited to play, presumably for complimentaries. Go there today and you will see that the whole floor has now been taken over by various lower end junket agents. The premium club has been sectionalised, with each section al- located to a junket operator. Each set of ta- bles is anchored by a junket counter where the staff go to roll the chips. So what happened to the Premium club concept? Sands famously scaled back its fine- dining establishments after it discovered that Chinese gamblers preferred fast no- nonsense fare. Sands has also found that the other preferences of Vegas high-rollers are not shared by their Chinese counterparts. In Macau, the customers like their gam- bling hard and fast. Their entertainment… what entertainment? Sands has a theatre that has yet to stage a performance. In fact, I would even go so far as to predict that when the Vegas-style shows and entertainment actually do kick off at the Venetian, the tick- ets that are comped to the junket agents will end up primarily in the hands of staff and friends (if the guests at the Venetian Gala Dinner were any indication). Coming back to the Premium club con- cept, it would never have worked in Macau because of one major consideration: why would someone play for comps when they can have the equivalent in cash? Comps for VIPs work in other jurisdictions where the commission programs are not available to the domestic customers (Vegas, Malaysia and Australia). But where the players have a choice of opting for cash or comps, no prizes for guessing which they will opt for. What this means for casino operators arriving in Macau is that the margins are thinner than what they normally see in their home base. However, for the time being, the volume of business is still there, albeit now shared by more casinos. Octo Chang is the pseudonym of our regu- lar columnist, a casino marketing professional with extensive qualifications and background in the gaming industry. Please feel free to for- ward any amusing anecdotes or observations to ka.chng@gmail.com