INSIDE ASIAN GAMING | January 2008 2 A New Wave Rolls In Editorial Editor and Publisher Kareem Jalal Director João Costeira Varela Business Development Manager Matt Phillips Operations Manager José Abecasis Contributors Michael Grimes, Octo Chang, Steve Karoul Photography Ike Graphic Designer Brenda Chao Inside Asian Gaming is published by Must Read Publications Ltd Suite 1907, AIA Tower, 215A-301 Av. Comercial de Macau - Macau Tel: (853) 6646 0795 For subscription enquiries, please email
[email protected] For advertising enquiries, please email
[email protected] or call: (853) 6646 0795 www.asgam.com Printed by Icicle Print Management (Macau) Ltd Tel: (853) 2871 2818 Fax: (853) 2871 2898 www.icicleprint.com A s Inside Asian Gaming has detailed since its inception in October 2005, the drought of legal gaming options in Asia is giving way to a flood. Prior to the liberalisation of Macau’s casino industry, the city had long been character- ized by a lack of options and monopoly-era complacency. Choice finally arrived in Macau in May 2004 when Las Vegas Sands Corp (LVS) unveiled Sands Macau, the first foreign-operated casino in the city, ending local gambling mogul Stanley Ho’s 42-year monopoly. Sands’ spacious and com- fortable main gaming floor, along with China’s easing of travel restrictions on mainlanders wishing to travel to Macau and Hong Kong, drew a rush of gamblers to Macau. After the opening of Sands, there was a fairly lengthy gap in the pipeline of new market-rev- olutionizing properties in Macau.The pipeline resumed in earnest at the end of 2006, when Wynn Macau and StarWorld joined the landscape, consolidating the critical mass of properties on the Macau peninsula—along with Sands and Stanley Ho’s ageing Lisboa—creating the city’s first ca- sino“strip”along Friendship Avenue. Choice exploded in 2007. First came Stanley Ho’s answer to the new competition, the Grand Lisboa, in February. Although our popular—and often caustic—casino marketing columnist Octo Chang accuses the property of being a “cheap copy” of Sands Macau in his inaugural “Brickbat & Bouquet”awarding on page 18, he does acknowledge the iconic appeal of the massive LED screen which forms the façade of its egg-shaped podium. Octo also points out that Stanley Ho’s company, SJM,has a long way to go in shaking off that monopoly-era complacency and offering an attractive alternative to the newcomers. We have detailed the myriad teething troubles experienced by Crown Macau since it opened in May.By trumpeting itself as the city’s first“six-star”property, it arguably set itself up for a fall.Crown Macau’s latest audacious move sees it “throwing Macau’s VIP room rulebook out of the window and challenging other casino operators to what in effect is a trade war,” as detailed in “Chips With Everything”on page 26. The Venetian Macao opened in September, becoming Asia’s largest building, the world’s larg- est casino (and second largest building), and employer of 5% of Macau’s workforce.The length of the walk to your suite at The Venetian, as bemoaned by Octo, is rivaled by the miles of newsprint already devoted to discussing the property, so we’ll spare you here and instead refer you to our detailed analysis of its market revolutionizing effects in the October issue, or to our “Bigger Versus Better” debate in the November issue. All content from last year can be accessed online at www.asgam.com . For the moment, The Venetian sits by its lonesome on Cotai, while the Friendship Av. strip saw a new addition on December 18, with the unveiling of the ultra-chic MGM Grand Macau—yours truly’s pick for best looking property in the city. The only question now, as discussed in our cover story, is whether the property’s coolness will actually draw Macau’s high-end gamblers. Even though barely two weeks had passed since the opening, analysts were already complain- ing of “weak results” at MGM Grand Macau by early January. The property needs time to settle in and develop relationships—particularly with junket operators, who form the backbone of Macau’s high-end gaming business. Crown Macau’s predatory move does not help. Fortunately, MGM MIRAGE CEO and Chairman Terry Lanni made it clear to Inside Asian Gam- ing , even before the property opened, that “we’re going to look at this long term, and know it’s a very quickly changing marketplace.”So while the twenty-something-year-old analysts try to make prophesies based on two weeks of data,Mr Lanni knows his ultimate boss,legendary MGMMIRAGE majority-owner Kirk Kerkorian, is a “very long-term thinker”, which he adds is “pretty amazing for someone who’s 90 years old. He never asks about quarter to quarter profits.What he likes is a man- agement team that’s making the right decisions for the long term.” As discussed in past issues of Inside Asian Gaming , the casino legalisation wave is spreading across Asia, most notably having struck Singapore after the city-state was inspired by Macau’s re- cent success to develop casinos in order to give its tourism industry a boost. Last month’s issue includes a full regional roundup,“Hare and Tortoise Race”, detailing the progress of the major Asian markets in either legalising or expanding their casino industries.While some of the markets tipped to imminently allow casinos, including Japan and Thailand, appear to have lost momentum due to domestic political turmoil, there were notable surprise developments, such as Cambodia’s emer- gence as the next hot destination for casino investment and market growth. The other nascent wave to hit Asia is online gaming, and there is huge potential considering less than 1% of total gaming in the region is conducted over the internet. In “Fresh Fruit” on page 13, we discuss the prospects and potential pitfalls for the development of Asia’s online gaming market.The main conclusion, as the title suggests, is that the market is ripe for the plucking. Kareem Jalal We crave your feedback. Please send your comments to
[email protected]