All In

A tale of three cities

If 2006 was the year that Macau's casinos overtook the Las Vegas Strip, it was last year that the enclave surpassed both its nearest rivals put together.

Before Macau hit the jackpot by ending its casino monopoly, the Las Vegas Strip and Atlantic City, New Jersey, had long reigned as the world's largest and second-largest gaming market, respectively.

No more. Consider that in the first two months of this year Macau's casinos raked in US$2.49 billion. That compares with US$1.15 billion on the Las Vegas Strip and US$739 million in Atlantic City - or a total of US$1.88 billion for the twin capitals of gaming in the United States.

What's more, Macau's revenues surged more than 60 per cent, while both US cities saw declines in their casino winnings from a year ago. Common sense says Macau cannot keep growing like this forever. But then again, common sense doesn't generate HK$10 billion a month in casino revenues.

Casino slowdown? Don't bet on it

It was against this backdrop that Macau Chief Executive Edmund Ho Hau-wah's much publicised announcement that the city is putting the brakes on new land deals and licences for casinos came. It is also likely to score his beleaguered administration some points with an increasingly disgruntled populace.

Ordinary residents have suffered the nastier side effects of the casino boom. Inflation is bordering on 10 per cent, the wealth gap is widening, and soaring housing prices - driven up by punters from Hong Kong and the mainland - are threatening to price many non-casino workers out of the market and across the border to Zhuhai . No doubt a moratorium on new casino development would help ease some of these pressures. But that is not what Mr Ho promised.

Read the fine print: 'Gaming projects under construction, approved or under discussion with the government will not be affected,' a statement on the measures released this week by the Government Information Bureau said.

Casino resorts now under construction, approved or under discussion with the government represent around US$20 billion in additional investment. Over the next three years or so, some 20,000 hotel rooms will be added in the city, and more than double the number of casino tables and slot machines currently installed. Macau casino slowdown? Don't bet on it.

Shifting table floors

The game of baccarat dominates casino floors in Macau and will continue to do so for a long while yet. In the first three months of the year, casino winnings from VIP baccarat surged 73 per cent and accounted for an immodest 69 per cent of all gaming revenue.

But that doesn't mean there isn't room for more variety, and the shifting mix of other casino games on offer is interesting. The amount of money punters left behind on the roulette tables, for instance, nearly tripled during the first three months of the year to 214 million patacas, up from 77 million patacas a year ago.

The first quarter also witnessed the rollout of Texas hold'em poker. Launched on four tables at the Grand Lisboa in mid-February, the game raked in a mere 4 million patacas for the house over the six-week period to the end of March.

But that doesn't tell the whole story. In Texas hold'em, the house only makes money by 'raking' a commission from the pot that is limited to 3 per cent to 5 per cent of total wagers, as per Macau gaming regulations.

That implies punters bet some HK$80 million to HK$130 million on the poker tables at the Grand Lisboa over six weeks. Not quite the volumes seen on baccarat, but not a bad start either.

Dog days again?

Pity the pooches. The rise of flashy casinos in the past few years has spelled tough times for the Canidrome, the city's once popular greyhound racetrack. But things are finally looking up.

After falling for three years, winnings at the Canidrome surged 46 per cent last year to 98 million patacas - their highest level in at least five years.

What's more, first quarter revenues from greyhound racing was 40 million patacas. That puts the track on pace for another bumper year of about 160 million patacas if it can maintain its stride.

Every dog has his day, even in Macau.