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Smaller casinos face biological choice: adapt or die

Many of Macau's older and smaller casinos, which are struggling to compete against glitzy new Las Vegas-style resorts, face a stark choice: innovate or die. For one, at least, the future is digital.

Electronic games developer Paradise Entertainment said this week it would take over all five floors of the six-year-old Kampek casino, next door to Stanley Ho Hung-sun's Casino Lisboa.

Paradise, which for a year has operated an e-casino on the third floor of the building, will expand to offer 730 electronic baccarat betting terminals and up to 80 traditional card tables. The reconfigured property opens today.

Now, Paradise will receive 55 per cent of the gaming revenue and operate the expanded e-casino as a franchise under SJM's licence. SJM will pay the 40 per cent gaming tax and keep a 5 per cent licensing fee. Because of the heavy reliance on gaming machines, Paradise's operating costs are dramatically lower than traditional table-centric casinos.

'All this talk about Macau's legacy properties closing down is [balderdash],' Paradise executive director Aaron Park said. 'They just have to figure out new ways to become leaner and meaner.'

Houses always alert for oddball gaming ideas - as long as they pay There is a memorable scene in the film Vegas Vacation where Chevy Chase (as Clark Griswald) attempts to win back his hefty losses by betting his last dollars at an oddball gambling hall off the Las Vegas Strip.

The corny casino games on offer are quickly revealed as either suckers' bets or too far-fetched: dodgy-looking dealers tout 'Rock-Paper-Scissors', 'Casino War', 'Coin Toss' and 'Guess what number the dealer is thinking'. But don't laugh too soon - casinos are always on watch for the next new game that entices punters and has a built-in house advantage.

Here, Macau offers an interesting case study. The influx of new competition has seen the introduction of several new casino games and spelled the end for others. Gone from the gaming floor are pachinko, boule and football poker - and several other games look to be heading in the same direction. Paikao is making a precipitous decline as a generator of casino revenue, while the facile Lucky Wheel, which was only introduced in 2003, appears to have already fizzled and now generates around 3 million to 5 million patacas in quarterly revenue across the city.

Several new games have cropped up in recent years, many of them old Las Vegas standbys that are only just now making inroads in Macau.

Casino War, it turns out, is a real game: it managed to separate unlucky punters from 51 million patacas in the three months to June, up from just 1.2 million patacas a year earlier.

Craps made its Macau debut only a year ago, but has spread rapidly and generated 25 million patacas in revenue during the second quarter.

Of course, none of this compares to baccarat, which booked 25.33 billion in revenue during the quarter - a lucky 88 per cent of all casino winnings in Macau.

But the shifting mix of casino games on offer does keep things interesting for punters and proprietors alike. Anybody who feels like testing their luck at 'guess what number the columnist is thinking' should e-mail me now.