As I prepare for my one trip to Asia each year, I wonder how these jet-setting casino executives can take all that travel. The flight alone kicks my butt, and it takes me a couple of days to get acclimated. Yet, there are casino execs, particularly in the companies that operate in Macau, that do it multiple times each year. And some of them are my age or older! Amazing.
But I do enjoy my annual trip to Macau for G2E Asia. The differences from one year to the next are always impressive, and now, when I step back to consider the changes that have occurred since I first went there for the opening of the Venetian Macao, I’m flabbergasted by what has happened in less than 10 years.
If you just consider the Cotai Strip, where the Venetian is located, there probably has been more gaming money invested there than in any place in the world at anytime in history. Studio City, which I’ll see for the first time during G2E Asia, alone cost $3.2 billion. Galaxy Macau is north of $5 billion total.
And the Sands China properties after the Venetian—Four Seasons, Cotai Central, Parisian and the included retail/non-gaming developments—have to be approaching $15 billion. Wynn Palace will open later this year at a cost of about $4 billion, followed by MGM Cotai; add another $3 billion. Not to mention Louis XIII (now simply “13”—a name that wouldn’t go over well in English-speaking markets) at a couple of billion.
So you can understand the angst about the decline in the VIP market over the past few years. When you see a market segment where at least 70 percent of the revenues shrink so dramatically, those investment dollars look a bit like overkill. But on the reverse side of the coin, while it’s no longer a $40 billion-a-year market, it is $25 billion, far exceeding any other jurisdiction in the world. So, it’s all relative.
But it’s the other Asian markets that interest me, as well. Having been to the Philippines a couple of times and witnessed the integrated resort development plans there, it’s not surprising that this has quickly become a growth market. What is surprising is that you can get players from the airport to the Entertainment City campus (only about five miles away) in less than an hour. Manila has some of the worst traffic I’ve ever seen.
Singapore seems to be a mature market now. No more competition coming on, no greater government involvement in the businesses (although it was a little daunting in the beginning there).
There are many jurisdictions I have yet to visit, but I’m penciling them in for a future Asia voyage.
I’m somewhat surprised about the increased investment in the Northern Marianas islands. Tinian has had one casino for many years (now closed) and Saipan has struggled with the concept of casinos for just about as long. And now we’re supposed to believe that this will be the new gambling mecca?
South Korea has had its fits and starts, and it still confuses me why they are taking such a hard line against citizens gambling, particularly when they have one casino in the middle of nowhere where the locals are allowed to gamble. I would think a Singapore-style daily or annual entrance fee would work well in Korea. And now that the Mohegan tribe partnership has been approved for an Incheon Airport integrated resort, it seems only a matter of time before the government sees the light on Koreans gambling.
And do we need to even mention Japan again? No, we don’t.
But the Southeast Asian countries of Vietnam, Cambodia and Thailand (even throw in Laos and Burma) deserve lots of attention because of action in mergers and acquisitions within the past year. Thais and Vietnamese seem to be the principal market here, so if those countries ever get their act together, it could become a very vibrant region, not only for the locals but also for Chinese.
And lest we forget Australia, where there are currently several integrated resorts/casinos on the drawing board. Most of that development is being done with an eye toward the Chinese market (as is most gaming development in Asia).
Someday I’ll get to see some of the fantastic casinos of Australia and New Zealand. But wait, that’s an even longer flight than my annual trip to Macau. Guess I’ll have to combine them one year.