• Thu
  • Sep 18, 2014
  • Updated: 1:18am

Asian casinos to top US rivals in revenue

PUBLISHED : Wednesday, 04 June, 2008, 12:00am
UPDATED : Wednesday, 04 June, 2008, 12:00am

Macau expected to sustain lead and growth rates

Commercial casinos in Asia are likely to overtake their United States counterparts within the next five years and Macau is expected to continue leading the way, according to a survey by the American Gaming Association.

Commercial casinos in the US gained US$34.13 billion in gross gaming revenue last year, according to the AGA.

That is more than double the US$14.6 billion figure for casinos in the Asia-Pacific region in 2006, according to a survey last year by PricewaterhouseCoopers.

But a survey released yesterday in Macau on the sidelines of Global Gaming Expo Asia and published by AGA found that 84 per cent of industry experts polled believed Asian casinos are 'very likely' or 'somewhat likely' to surpass US commercial casino revenue (excluding native American casinos) by 2012.

While based on a small sample of 23 gaming executives, analysts and academics with exposure to Asia, the survey is one of few that have attempted to capture opinions within the industry towards what is unquestionably its most dynamic growth market.

A majority of respondents to the AGA poll had 16 or more years experience in the gaming industry and more than one quarter served as chief executive or a comparable position within their organisation.

Regarding Macau, where casino revenues have increased an average 41 per cent per year since 2005, 52 per cent of the respondents said the enclave could maintain present growth rates for at least another three years.

However, opinions were divided over challenges confronting Macau's gaming industry, specifically regarding the future role of VIP junket operators and the impact of new restrictions on casino development announced by the Macau government in April.

Junket operators are the middlemen who effectively control Macau's VIP gaming segment by bringing high rollers to casinos, lending them money to gamble with and collecting their debts. In return, junkets receive payouts equal to 40 to 50 per cent of casino revenues. VIP gaming accounted for 69.7 per cent of all casino revenue during the first three months of the year.

Fifty-two per cent of survey respondents said junkets and the VIP segment would be become less important over the next five years.

In terms of countries eyeing gaming liberalisation, 45 per cent of respondents said Taiwan would likely move first. Another 24 per cent said Japan would be first to open to casinos, while 21 per cent favoured Thailand.

The May survey also attempted to quantify industry opinion towards restrictions on new casino development, including a ban on adding gaming tables and slot machines at existing casinos and a 10-year freeze on issuing new gaming licences.

Sixty-one per cent of respondents said the table and slot caps would remain in place for two years or less.

In terms of challenges, the 'greatest threat to Macau's prosperity' is the ability of infrastructure to keep up with visitation increases.

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