Caelum Haverford's blog : Macau's Time to Shine: An Unlikely Challenger to Vegas
Macau: Outshining Its Casino Competitors and Predicted to Soar Even Higher
Man, you've gotta hear this – they used to call Macau ""The Las Vegas of the Far East,"" no joke. That was Sheldon Adelson's pet name for it – you know, the big-shot American casino boss behind Las Vegas Sands Corporation. Back when Vegas was all the rage, and Macau was just a blip on the map, anyone would've cracked up at that comparison. But now? Calling Macau anything less than a casino titan is basically a diss. Last I checked, Macau's casinos raked in a whopping $38 billion – that's over six times what the Vegas strip managed to pull in. Now that the Chinese middle class has got some cash to burn, those baccarat tables over there can't catch a break – they're that packed!
Let me take you back a bit. Gambling's been legit in Macau for ages – like, since it was under Portuguese rule More Help. But the casinos? They used to be these dingy little joints. I remember this one time, our guy on the ground had a chat with Stanley Ho – the big dog with the gambling monopoly there till 2002. Our pal mentioned all the, uh, ""ladies of the night"" in Ho's casino. And Ho? He deadpans back, totally playing it cool, pretending to be all shocked about it.
But hey, times are a-changin'! Macau's cleaning up its act, and guess what's helping? The big leagues from America are moving in, and they've gotta keep things on the up and up because they answer to US regulators. Plus, Macau went and loosened up their licensing laws, so now they've got these monster mega-casinos popping up – like a ginormous copycat of Adelson's own Venetian from Vegas.
These flashy new spots are sparking insane growth. From 2008 to 2012, Macau's gambling revenue was jumping by 29% each year. No other spot can touch that. And this isn't just about Macau, alright? It's a huge shake-up in the whole $160 billion-a-year worldwide gambling scene. As recently as 2010, the US was hogging nearly half the global gambling revenue pie, with Asia-Pacific trailing at about 30%. But check this – the consultancy PwC says that by 2015, Asia-Pacific's going to leapfrog to the top spot.
The thing with Macau's success? It's like the perfect storm of geography, history, and politics. Chinese folks love a good gamble, but the mainland government's not having any of that casino business. But in Macau, they kept the doors open to casinos even after Portugal handed back the reins in 1999. Macau's got its own set of rules, like Hong Kong, and it's just a short hop away from a billion people who might wanna try their luck.
But Macau didn't blow up just 'cause of your average Joe tourists like in Vegas. No, sir. It's the ""high-rollers"" – those mainland business hotshots and government types, brought in by ballsy junket operators bbc, that swelled the ranks. And these Macau casinos? They aren't as nosy as the ones in the States about where these whales get their dough.
The casino folks let the junketeers handle the dirty work. They find the big fish, fly 'em to Macau, skirt around China's strict cash rules with some credit magic, and run those swanky VIP rooms. It's like a casino within a casino, keeping the official guys clear from the muck. Fun fact – collecting gambling debts through the courts is a no-go in China, so the junketeers have their own ways to get the job done, all hush-hush, back on the mainland.
Macau might've kicked Vegas to the curb, but now it's got some homegrown competition heating up. Singapore's casinos are spanking new and snatching some of Macau's best clients. And as this next piece gets into, there are big casino plans all over the place – Japan, the Philippines, Australia, even Russia's far east.
All these billionaire builders and politicos are betting big that they can charm the Chinese high-rollers away from Macau cnn. I've heard it straight from a Chinese businessman who's shown his rich pals a good time in Macau – the new Chinese leadership's cracking down on corruption and flashy spending, so these guys are scouting for new playgrounds out of Beijing's watchful eye.
Michael French, the head honcho at Solaire in Manila's Entertainment City, is all about snagging just 7% of Macau's action to hit their targets. And believe it or not, Vladivostok, despite being a far cry from tropical Macau, is tossing its hat in the ring 'cause it's a quicker trip for Beijing's big spenders.
These mainland high-rollers have been fueling Macau's growth for sure. They're still filling up the coffers of the big-name casinos with 60-65% of the revenue. But could this high-roller heist put a dent in Macau's mojo?
Well, there's a bunch of reasons why Macau might actually have its best days still coming. The big one? Unlike those other places you gotta fly to from China, Macau's basically stuck right onto the mainland – you can waltz in over land. That means they've got another trick up their sleeve: the everyday gambler.
Your average Joe from next-door Guangdong has been hitting Macau for quick day trips for the longest time. The typical visitor to Macau bounces after less than two days, while Vegas tourists chill for about a week. Now, these regular folks might not seem as flashy as the high-roller crew, but here's the kicker: they're actually more profitable cbc.
See, rolling out the red carpet for VIPs costs a pretty penny – we're talking luxury digs, the finest bubbly, and some perks on the shadier side. Meanwhile, the regular gamblers? They don't get any of that. So yeah, the VIPs are still where most of the revenue's at, but it's the masses that bring home the bacon when it comes to profits.
