InPark’s Online News Editor Joe Kleiman created this special three-part series on the Asian Casino business.
Part One: The Vegas Pack
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| The Sands Macau |
THE MACAU DIFFERENCE
Over the past thirty years, Las Vegas casino operators have had to deal with domestic competition outside of the Las Vegas market. After a failed attempt to drum up new business by changing the Strip into a family friendly destination, Vegas operators decided to take on the competition head-on by expanding into other markets, operating and often owning casinos and resorts in such markets as Atlantic City, the riverfront communities along the Mississippi, and the Gulf Coast. Another major revenue stream for the Vegas companies became the management of casinos owned by Native American Tribes and state and local municipalities.
Then in 2001, something happened in China that would open up the opportunity for casino attendance and revenue on a scale to exceed Vegas numbers – the Chinese government eliminated a Hong Kong – Macau syndicate’s monopoly on gambling and began issuing casino licenses in Macau to other operators.
Over the past thirty years, Las Vegas casino operators have had to deal with domestic competition outside of the Las Vegas market. After a failed attempt to drum up new business by changing the Strip into a family friendly destination, Vegas operators decided to take on the competition head-on by expanding into other markets, operating and often owning casinos and resorts in such markets as Atlantic City, the riverfront communities along the Mississippi, and the Gulf Coast. Another major revenue stream for the Vegas companies became the management of casinos owned by Native American Tribes and state and local municipalities.
Then in 2001, something happened in China that would open up the opportunity for casino attendance and revenue on a scale to exceed Vegas numbers – the Chinese government eliminated a Hong Kong – Macau syndicate’s monopoly on gambling and began issuing casino licenses in Macau to other operators.
In terms of potential customer base, more than one billion people are estimated to live within a three-hour flight from Macao and more than three billion people are estimated to live within a five-hour flight from the city.
In terms of revenue, according to the State of Nevada Gaming Control Board, in 2011, the 256 casinos in the state (not just Vegas) that grossed $1 million or more earned a combined $10 billion in gross casino revenue. On the other side of the world, the Chinese Special Administrative Region’s Gaming Inspection and Coordination Bureau reported that during the same period, the 33 Casinos in Macau earned a combined gross casino revenue of $33.5 billion.
Five of those Macau casinos are multi-billion dollar resorts owned and operated by Las Vegas casino companies MGM International, Las Vegas Sands and Wynn… click here to read the rest of Part One.
Part Two: Genting
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| Resorts World Genting |
ORIGINS
Genting’s roots go back to 1964, when the Speaker of Malaysia’s lower house of parliament, Tan Sri Haji Mohammed Noah bin Omar, visited a hilltop resort while overseeing the construction of a hydro-electric project in the country’s Cameron Highlands. He liked the concept, but wanted something even bigger and more spectacular for his country. In 1971, his resort would open in the Genting Highlands. The investment company he established to build Genting would go on to open and acquire new properties in Singapore, the Phillipines, the United States, and Great Britain and would venture into cruiselines, palm oil production, power generation, paper manufacturing, and oil exploration.
READ THE LATEST GENTING FINANCIALS AT IPM NEWSDOCS
There are four main divisions of the company: Genting Singapore, Genting Malaysia Berhard, Genting Plantations Berhard, and Genting Hong Kong Limited. In this piece, IPM will look at the three divisions that entail hospitality and attractions operations.… Click here to read all of Part Two.
Genting’s roots go back to 1964, when the Speaker of Malaysia’s lower house of parliament, Tan Sri Haji Mohammed Noah bin Omar, visited a hilltop resort while overseeing the construction of a hydro-electric project in the country’s Cameron Highlands. He liked the concept, but wanted something even bigger and more spectacular for his country. In 1971, his resort would open in the Genting Highlands. The investment company he established to build Genting would go on to open and acquire new properties in Singapore, the Phillipines, the United States, and Great Britain and would venture into cruiselines, palm oil production, power generation, paper manufacturing, and oil exploration.
READ THE LATEST GENTING FINANCIALS AT IPM NEWSDOCS
There are four main divisions of the company: Genting Singapore, Genting Malaysia Berhard, Genting Plantations Berhard, and Genting Hong Kong Limited. In this piece, IPM will look at the three divisions that entail hospitality and attractions operations.… Click here to read all of Part Two.
Part Three: Gambling Laws
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| Resorts World Miami |
While gambling has always been a cultural institution in the Asia/Pacific region, Western style gambling has never been at the forefront of the region’s economy until recently. Each nation has a different approach to casino regulation, based upon colonial law (Singapore’s laws are based on those in British, while Macau’s are based on the Portuguese), the desire to prevent gambling debt and addiction among local populations, and a governmental directive to weed out criminal and terrorist elements.
Australia
Casinos have been in operation in Australia and New Zealand since 1973. In 2008, the Allen Consulting Group issued a report, Casinos and the Australian Economy, on behalf of the Australasian Casino Association, to the government’s Productivity Commission Inquiry into Gambling. The report found that:
· Over 1 million international tourists made 2.4 million visits to Australian casinos in 2007/08. These tourists spent a total of $4.9 billion during their time in Australia – an average of $4940 per visitor, compared to $2630 by international visitors not visiting casinos.
· A group of international visitors, known as international VIP program players, spent $739 million during their visits to Australia in 2007/08. Expenditure associated with these players increased gross domestic product by $84 million in 2007/08. Maintaining this export will raise Australian private consumption by $1.8 billion over a 10-year period.
The largest of the casinos in Australia is the Crown Entertainment Complex in Melbourne, one of two casino resorts (the other in Perth) operated by Crown, a spinoff of Publishing and Broadcasting Limited. The Crown Entertainment Complex in Melbourne is one of the largest integrated resorts in the southern hemisphere with its casino, hotels, function rooms, restaurants, shopping and entertainment facilities.
The casino currently features 2,500 electronic gaming machines and has approval to operate 500 table games. The Crown Melbourne casino licence extends to 2033. Crown Melbourne operates one of the largest single-site VIP operations in the world. Its three hotels offer approximately 1,600 rooms, including 31 luxury villas.
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| Dragons Treasure at City of Dreams, Macau |
Crown, like Malaysia’s Genting, has become a major international casino operator. It’s investments include a betting exchange in Australia and New Zealand; Cannery Casino Resorts, a casino and racetrack operator in Las Vegas, NV and Pittsburgh, PA, USA; Aspers Holdings, which runs regional casinos in the UK; minority stakes in the Las Vegas-based Harrahs and Stations casino chains; and a 33% stake in one of the biggest players in Asia –Melco Crown.
Macau
Melco Crown is a direct descendant of Macau’s gambling heritage. From 1962 through 2002, the Sociedade de Turismo e Diversões de Macau, under the control of Stanley Ho, held a monopoly on gambling operations in Macau. Once Portugal handed the tiny colony back to China, the Chinese government began handing other licenses. Ho still controls 14 of the casinos, with an additional three under the control of Melco Crown, headed by his son Lawrence…. Click here to read the rest of Part Three.
