Inside Asian Gaming

inside asian gaming October 2015 18 Cover Story Before that, table games were struggling to climb out of the economic downturn of 2001-2002. Baccarat, which had been in decline four straight years, was viewed as something of a novelty game, a plaything of the international high end, available almost exclusively, then as now, at the largest resorts. At the end of 2003, there were 81 tables where you could play it, comprising all of 3% of the Strip’s table inventory. Revenues were falling at an average rate of 9.5% a year. But it was the largest driver of win after blackjack, good for $359 million in 2003 on relatively low volumes that were working at the time to skew the game’s inherent volatility way in favor of the house. That mattered enough in a market where tables were in the doldrums generally to worry operators about their ability to compete with the rest of the world, and the industry’s powerful lobby prevailed on the Nevada Legislature to scrap a longstanding regulation requiring all games to be played in public. Then Sands Macao opened and everything changed. Gaming revenue in Stanley Ho’s sleepy casino enclave on the South China Sea leapt 44% in 2004 on a 34% surge in VIP baccarat. Halfway around the world, 2003’s Strip baccarat wagers of $1.8 billion turned into $4 billion, revenue soared 36%, 35% the year after that, 25.5% in 2006. When the recession hit and gaming revenues plummeted, baccarat volumes largely held up, and this is interesting, too, because it also appears to point back to Macau. The Chinese government at that time had tightened restrictions on travel to the city in the wake of a number of gambling-related scandals involving executives of state-owned enterprises. In 2009, VIP revenue growth dropped to 8% after three years of double- and triple-digit increases, topped by a 51% burst in 2007. The global financial crisis has to be factored in too. In any event, total revenue growth also fell to single digits. That had never happened since the market was opened to competition. And Vegas got the spillover. In a year when total Strip table volume fell by 2.5%, baccarat wagers jumped $1.4 billion, a 20% increase, and that took the edge off the recession and led a 9% recovery in table revenues the following year, 4% overall, despite a third down year for slots. In 2010, Macau was the largest casino revenue market in the In 2010, baccarat wagers on the Strip broke the $10 billion mark, and the game surpassed $1 billion in win for the first time, supplanting blackjack as the biggest money-maker in tables. For the first time in memory, table games generated more annual revenue than slots.