Frugal gamblers keep baccarat tables in the black
A school of thought in the casino business has it that gambling is a form of 'non-discretionary' spending and should hold up well in an economic downturn.
Visitors may cut back on flashy hotel rooms, fancy meals and big-ticket shows, but a core clientele will keep coming back to the tables.
This theory doesn't really apply to fly-in destinations like Las Vegas, which is now well into its second year of declining gambling revenue. But casino floor winnings at smaller regional US gaming centres, which depend more on people living in the immediate area than on long-haul tourists, have in several cases held up respectably despite the current recession.
Macau is similar to those locales, in that its breadbasket by and large remains neighbouring Guangdong and Hong Kong. But the latest figures from the Macau gaming regulator suggest only some table games are non-discretionary.
Casino revenue across the city was down 12.4 per cent in the first six months of this year. But a closer look at the numbers for mass-market table games shows that the punters kept coming back to the baccarat tables despite the downturn (see first chart).
Baccarat, of course, has dominated the action in Macau for at least the past three decades. But the influx of new casinos over the past five years has brought with it the rapid growth of other offerings, including blackjack, roulette and Caribbean stud poker. Revenue from new games has been growing at an explosive pace, at least until recently.
In Macau's first sustained downturn since the end of the casino monopoly, it appears that players are going back to the basics.
Among the top four mass-market casino games on offer, revenue from blackjack, sic bo and stud poker has declined for three quarters in a row, in some cases plunging almost 30 per cent.
However, revenue from non-VIP baccarat has continued to build, rising 12.7 per cent in the three months to June from a year ago (see second chart).
Indeed, baccarat's recession-proof appeal to Macau's die-hard gamblers likely extends beyond simple affection - it offers the fairest odds among most table games (unless you are a skilled blackjack player).
An oxymoron to be sure, but Macau's best customers at the moment appear to be the frugal gamblers.