Inside Asian Gaming

Editorial Inside Asian Gaming is published by Must Read Publications Ltd 8J Ed. Comercial Si Toi 619 Avenida da Praia Grande Macau Tel: (853) 2832 9980 For subscription enquiries, please email subs@asgam.com For advertising enquiries, please email ads@asgam.com or call: (853) 6646 0795 www.asgam.com Inside Asian Gaming is an official media partner of: http://www.gamingstandards.com Michael Grimes We crave your feedback. Please email your comments tomichael@asgam.com Publisher Kareem Jalal Director João Costeira Varela Editor Michael Grimes Business Development Manager Domingos Abecasis Contributors Desmond Lam, Steve Karoul I. Nelson Rose, Richard Marcus Shenée Tuck, James J. Hodl Andrew MacDonald William R. Eadington Graphic Designer Brenda Chao Photography Ike East MeetsWest—Maybe A poster advertising campaign currently on display in Hong Kong for a wealth management company neatly sums up the way the world is changing in the 21st century. It features a confident-looking, sharply suited Chinese executive stepping from a limousine onto a rainy pavement—to be greeted by a respectful looking male go-fer with an unfurled umbrella. The gag is that the go-fer is Caucasian. The message at first sight seems unambiguous. Asians are themasters now, andWesterners their servants, even if we’re talking about the lucrative and specialist field of wealth management. And yet that poster campaign is actually quite subtle. It neatly sums up the reality of the relationship between East andWest. They need each other. In the words of the Pet Shop Boys’ song: “You’ve got the brawn, I’ve got the brains, Let’s make lots of money.” In this case ‘brawn’ stands for the financial muscle of Asia and ‘brains’ stands for the depth of asset management experience of the West. If we translate that brawn-brains dynamic to the Asian casino industry, we can see that in places including the Cotai Strip, Western know-how on management of the non gaming offer such as food and beverage, retailing and hotel accommodation has brought major improvements to standards in Macau. The corollary is that Chinese gamblers in Macau have brought a major improvement in the revenues of the Las Vegas operators who set up shop there, even if the full effects of that won’t be felt until those companies have serviced all the debt they raised to build their properties. Michael Leven, President and Chief Operating Officer of Las Vegas Sands Corp. told Inside Asian Gaming recently that he expects 85% of the company’s annual EBITDA will come from its Macau and Singapore operations once Marina Bay Sands in Singapore is fully open—with only 15% from the United States. The arrival ofWesternoperators inMacauhas also frankly stimulated amajor improvement in the quality of gaming regulation there. The world—including Beijing and regulators in the US—is now scrutinising Macau closely, and the old, cosy, (some say too cosy) relationship between the former monopoly gaming operator and the government has probably changed forever. Or has it? The Chinese-run casino companies in Macau—Stanley Ho’s SJM and Galaxy Entertainment Group run by the Lui family—seem to experience fewer heart stopping surprises in terms of gear shifts in government policy than do the foreign operators. The suggestion is that the Chinese operators are just more in the loop with Macau’s and China’s political decision makers. Steve Wynn said recently he was considering moving his company headquarters to Macau. Most people thought he was just being polite, even if he does spend enough time there each year to warrant it. But Mr Wynn could buy every Ming Dynasty vase on the market and eat congee for breakfast every day—he could even start clipping ‘two-for-one’meal offer coupons out of the local newspapers—but he’s never going to be Chinese. What to do? Western operators could start by playing back recordings of the things they sometimes say about the locals, rather than worrying too much about cultural acclimatisation sessions for themselves or their expatriate staff. A recent gem was: “I think the Japanese authorities are intelligent enough to see they need a boost of tourism.” Glad we got that one sorted out. Singapore and the Keystone Cops Who would ever bet against an Asian junket operator in a battle of wits? It seems as if one or two of them have been running rings around the Singapore regulators’ carefully crafted anti-junket regulations. Stories are circulating of junket reps checking in to the Singapore casinos as individual VIPs and then handing over chips to their ‘friends’. Some of these ‘friends’ also just happen to be customers of a junket operator. How very convenient for all concerned. Of course it can only be amatter of time before the fun stops and the Singapore authorities nail shut the loophole. But it occurs to this publication that Singapore and other jurisdictions could take a leaf out the FBI’s book and turn these clever and quick-witted poachers into gamekeepers. It’s said that a cockroach can live on a single greasy human thumbprint for a week. Junket and sub junket agents have been pulling off a similarly impressive stunt, living on thumbnail-width VIP room margins for decades. If only that ingenuity could be put to work in the mainstream industry, then everyone’s bottom line could benefit.