High rollers in Macau might not be hitting the VIP baccarat tables like they were a year ago, but increasingly they are discovering the allure of the one-armed bandit. Slot machines, traditionally regarded as the epitome of the 'grind' or low-end market, have made serious inroads in high-rolling Macau in recent years. While still only a small piece of the overall market, revenue from slots has grown to US$742.81 million in the year to March from US$81.52 million in 2004. At the same time, the number of machines has increased fivefold to more than 13,000. Despite shrinking winnings from the credit-driven VIP tables in recent quarters, cash-focused slot revenue has maintained its double-digit growth rate. Slot manufacturers say much of this is due to an increase in the variety of games on offer, and indeed several homegrown firms are cropping up to rival market leaders such as Aristocrat Technologies, International Game Technology (IGT), Bally Technologies and WMS Gaming. And then, there are the slot high rollers. Peter Johns, the director of slot operations at MGM Grand Macau, talks about 'carry-bag players' who can bet as much as HK$40 million on slot machines at a single weekend. The pool of such slot players in Macau is not large, probably several hundred players, but it is growing. The heady volumes they wager can lead to significant short-term volatility for what is otherwise considered slow and steady grind market revenue for the house. 'Ten of them can make or break you,' Mr Johns said. The rival Wynn Macau saw slot wagers rise 42.9 per cent in the first three months of the year from a year earlier 'primarily due to the play of several high-end slot customers', according to Wynn Resorts' latest quarterly filing. As a result of the growing competition for business from slot high rollers, casinos are increasingly offering tailored services. Many machines are programmed to pay jackpots only after they reach certain levels and big players typically zero in on a single machine, pumping it full of money in an attempt to hit a big payday. If a slot high roller's time in Macau runs out before he nails the jackpot, he will often ask the casino to reserve the unit: 'They will say 'Turn off the machine and I'll be back next Friday',' said Mr Johns. But despite the growth of high-end play, Macau's slot market is unlikely to rival destinations like Las Vegas or Atlantic City any time soon. Slot machines accounted for 5.8 per cent of Macau's total casino revenue in the first quarter, compared with 52.8 per cent on the Las Vegas Strip. 'Slots have not developed that quickly in Macau, which is in line with the slow development of the mass market in general,' said CLSA gaming analyst Aaron Fischer. Mr Fischer cites a number of barriers to growth for the tourist 'mass market' including the city's underdeveloped infrastructure and relatively pricey hotel rooms. 'All in all, Macau is not yet fully equipped to handle the grind market,' he said. As recently as two years ago, some analysts were predicting Macau's slot machine segment could grow into a 30,000 to 50,000-unit market by next year. But delayed or suspended resort projects, Beijing's visa restrictions for mainlanders and the sheer dominance of high-roller table gaming have meant slower growth for the slot machine market. 'There's no question those huge numbers people talked about a couple of years ago have failed to materialise,' said Marcus Prater, the executive director of the Nevada-based Association of Gaming Equipment Manufacturers. But he adds: 'There's still business out there and it's not all doom and gloom.' Cath Burns, the Macau-based vice-president for Asia-Pacific at Bally Technologies, said: 'The visa restrictions meant we couldn't go to 30,000 slot machines. I still think Macau is a 30,000-unit market but we probably would not get there for another five years unless visa restrictions are relaxed.' Despite the macro-level challenges, the slot market continues to grow. Revenue from slots grew 13.22 per cent in the first quarter to 1.53 billion patacas, despite an 11.66 per cent drop in the number of units in operation as casinos sought to maximise their yields from each game by removing unproductive slots. 'People have to optimise revenue in expansion mode, but the lull is going to help people catch their breath and focus on optimising the gaming floor,' said Kurt Quartier, the vice-president of international casino markets at IGT. 'When we first started business in Macau, there were no local manufacturers, but we are seeing more and more emerging Asian manufacturers who look to Macau as their primary market,' said Ian Hughes, the managing director of slot machine testing firm GLI Asia. GLI tests games for compliance on behalf of gaming regulators in Las Vegas, Atlantic City, Macau and Singapore, and opened its first laboratory in Macau in November last year with six full-time local engineers. The firm expected that number to expand to 10 or 12 engineers by the end of this year, and that growth would be 'very much a function of how much local manufacturers expand', Mr Hughes said. So, will Asian manufacturers have the same impact on the global slot industry that their peers have had on the market for other electronic goods, like DVD players or personal computers? Mr Quartier of IGT, the world's largest slot machine maker, is unconvinced. 'I don't want to sound dismissive but anybody can make a box,' he said. 'Making good games is something different.'