For those of you who think that growth in the gaming industry is over, I suggest you simply take a look at some of the incredible opportunities opening up in places that have been under-penetrated until today.
And we’ll start where we’ve started over the last decade, Asia. The expansion in Macau is almost done, as the new Cotai properties have opened one by one over the last year, with Wynn Palace and the Parisian opening within weeks of each other. Still to go is the MGM Cotai property in August, and later on, the SJM Lisboa Palace that is slated for sometime in 2019.
And maybe that’s the date we can expect to get shovels in the ground in Japan. While gaming was legalized there late last year, there are still some legislative and business hurdles to overcome. The enabling legislation—regulatory structure, bidding process, locations—will take at least a year to complete, and then it’s uncertain how long the bidding will take. It’s almost a lock, however, that any foreign company will need to have a Japanese partner to enter that process, so it will undoubtedly be years before that is completed.
And now that Japan is gearing up, you have to question whether the Korean government will respond by allowing locals to gamble in the casinos in that country. Mohegan Sun will join with a local partner to develop a multibillion-dollar project adjacent to the Incheon Airport, and the ability of locals to gamble would certainly enhance that development.
Vietnam just stepped up to the plate in the last few months by passing legislation that allows a test period to evaluate gambling by Vietnamese citizens. Professor Augustine Vinh explains the details on page 10, but it appears that there will be substantial growth of gaming in Vietnam, and maybe a little contraction in Cambodia, particularly along the border between the two countries.
The Philippines is just completing—against all odds—Entertainment City in Manila, where four multibillion-dollar resorts will operate side by side. Okada is the third to open (after Solaire and City of Dreams Manila), with only a project led by Genting yet to debut. And there are discussions going on to add additional casinos outside of Manila in other beautiful areas of the country.
You might think Australia is saturated by gaming, but no one told the people in Queensland, where a major resort by Star Entertainment in Brisbane, and a second on the Gold Coast by the Chinese company ASF are on the drawing boards. And of course, Crown Resorts will build a huge VIP casino in Sydney’s Barangaroo area, along with the nation’s tallest building, a hotel expansion to Crown’s Melbourne project.
In Europe, a consortium of Hard Rock and Melco will develop a 400-room, five-star integrated resort on the island of Cyprus, putting 200 million people within an hour’s flight of this development. And while Spain has seen lots of starts and stops for IR projects, it appears a true mixed-use development is getting traction, as proposed by the Cordish Companies, owners of Maryland Live! outside of Baltimore, and lots of urban developments across the U.S.
Russian gaming is a mixed bag. While Melco’s Tigre de Cristal has been a roaring success near Vladivostok, a recent decision that quintupled gaming taxes overnight in Russia demonstrates yet again what a risk it is to operate casinos in a Communist country. The government already decided to shift one already-operating gaming zone to another region (the former Olympic region of Sochi), effectively destroying several casinos.
Another risky place to invest in casinos would be Central and South America. Unstable governments and economic chaos are constant threats, but the big prize appears to be Brazil. Even in the midst of both of those threats, gaming legislation is creeping along, and there will be major casino companies involved should it pass.
The U.S. has a few regions that are underpenetrated. One, Georgia, is actively courting casino legislation to fix an ailing educational program. Casinos in Atlanta would be a home run, and even one by the beautiful city of Savannah would be very successful. Texas is also underserved, but Texas casinos would severely damage operations in Oklahoma and western Louisiana. And New York will soon start a process for casino bids in the metropolitan New York City area.
So fear not, those who preach doom and gloom for casino growth. There is still room to move, and then we can start on the process of refurbishing what we started 40 years ago.