Macau

Macau: The Future Beyond the VIP

Fifteen years ago, on May 18, 2004, Las Vegas Sands Corp. opened Sands Macao and changed the course of casino gaming in the region.

Macau was once considered a secondary gaming market that catered to a small base of customers from Hong Kong and Guangdong, China. However, Sands Macao and subsequent entrants demonstrated that by providing high-quality gaming, dining and lodging environments, markets will respond.

In the case of Macau, markets responded enthusiastically. In 2005, the city’s casinos generated $5.9 billion in gaming revenue, and by 2018, the industry had generated $37.9 billion.

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Crystal Ball Gazing

Predicting the future of any industry has always been an inexact science. It requires an examination of historical trends, possible changes in public policy, the application of a variety of macro-economic theories, the unlikely entry of a disruption industry that could emerge as a worthy competitor, and a substantial amount of guesswork.

The problem is, when it comes to Macau, more often than not the soothsayers have been unable to predict the future.

When predictions are made, word spreads quickly. The number of media outlets devoted to the casino industry has increased and amplified the distribution of news. Casinos are now part of
the 24-hour news cycle; the industry has its own forums, dedicated writers and avid readership.

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Seven Keys to Casino Success

The success of Singapore’s recently established casino industry, along with the unprecedented growth in gaming revenues in Macau, has attracted the interest of governments throughout Asia. Several are considering instituting new policies that will permit the expansion of casino gaming in their countries in the form of so-called integrated resorts, as a means to boost
economic and tourism growth and generate tax revenues.

The examples of Macau and Singapore, together with those of other Asian countries that did not manage to enjoy quite as much success with their casino initiatives, have helped identify seven factors that are critical to the success of any new gaming venue in the region.

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What Can We Learn from Macau

As gaming markets mature and individual casinos’ databases become established, casino operators are able to better understand the demographic makeup of their core customers. With few exceptions many Indian casino operators have come to recognize that Asian Americans, in particular immigrants from China, make up a sizable minority of their customers and display an almost passionate love of casino gambling. To better serve this important segment, many casinos have introduced noodle bars, expanded Asian food offerings in their buffets, added Chinese speaking hosts and printed collateral material in various Asian languages. Some have also brought in Asian entertainers. While these programs make sense, they are essentially tactical plans that
are put in place on a hunch rather than understanding that player segment’s wants and needs. They fail to recognize that not all Asian American gamers are alike and each nationality has its own particular appeals.

For most domestic markets, Chinese Americans are the most dominant Asian gaming segment. Notwithstanding some markets may be comprised of other nationalities. Therefore, it is critical to first understand which Asian nationalities comprise the largest part of the casino’s demographic mix. If Chinese Americans are indeed the largest, then it is important to understand their unique wants and needs. And to really understand what motivates Chinese gamblers, you have got to go to Macau.

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