Inside Asian Gaming

February 2011 | INSIDE ASIAN GAMING 43 Policy Outlook and pathological gambling from 4.3% of the population in 2003 to 6.1% in 2007. This represents a 40% increase after four years of rapid development without checks. Still, the local population contributes only a small proportion of Macau’s gross casino gaming revenue. A 2002/3 survey of local Macau residents found more than 20% of respondents gambled in local casinos. The average money gambled per month per respondent was around US$87, or slightly more than US$1,000 per year. That would put the estimated gaming expenditure of local residents at around US$67 million in 2002/3, which though significant, constitutes only a small percentage of Macau’s annual gross casino gaming revenue. What is more worrisome is the level of problem gambling among Mainland Chinese visitors to Macau. There is currently no study to measure the impact of an expanded gaming market on gamblers from overseas. This is important to Macau’s gaming industry as it affects Macau’s relationship with its neighbours, particularly Mainland China, Hong Kong and Taiwan. It also influences decisions on visa control and hence adds to the overall economic costs of the liberalisation of Macau’s gaming industry. Anyone who suggests a more drastic change in government policies to advocate mass (leisure) gaming, while reducing the share of the VIP market, needs to consider the social impact of such a change. It does, of course, appear to be more in line with the government’s vision of making Macau a leisure and entertainment city—a city that attracts all types of visitors, rather than just hard-core gamblers. Inevitably, to support such an initiative, a strong industry-wide responsible gambling program must be put in place by the Macau government and all the casino operators. One thing is for sure: Moving forward, Macau needs a stricter regulatory control system for both VIP and mass gaming segments. The recent cap on the number of gaming tables is just one of the many controls that can be put in place. By itself, however, it seems unlikely the table cap will have any significant impact on gross gaming revenue (especiallyVIPplay) in the short term. However, any future measures will probably be geared towards reducing the relative size of the VIP market with respect to the mass market, and will lead to greater regulatory control over both segments. It may also lead to the creation of a stronger middle market (i.e. low VIP or highmass gaming). More importantly, any new measures must include a more careful selection of players brought into Macau and the instalment of protection programs for players. During this process, Macau will most likely register a slower growth in gross casino gaming revenue due to a reduced VIP segment as a result of a tightened player and trade member selection process. This will, however, create a stronger and more sustainable gaming industry—one that matches the interests of all stakeholders, not just the casino operators or junket promoters/representatives. Desmond Lam is an Associate Professor of Marketing at the University of Macau. He can be contacted at DesmondL@umac.mo . Visit www.DesmondL.com. This article was originally published in Casino Enterprise Management magazine Anyone who suggests a more drastic change in government policies to advocate mass (leisure) gaming, while reducing the share of the VIP market, needs to consider the social impact of such a change.