VEGAS INC Magazine - Latest Las Vegas business news, features and commentaries about gaming, tourism, real estate and more
Issue link: https://www.ifoldsflip.com/i/43679
COVER STORY China, Taiwan and Hong Kong. The remaining 10 percent are Japanese and Indian, with about 0.25 percent coming from the United States. The biggest surprise to Leven has been the enormous growth of slot machine play. "When we first got here, slots were not really the acceptable way to play," he said. "I think the electronic nature of the slot machine becomes very interesting to a player. We're seeing it in Singapore too. The Asians are technologically competent and electronically competent and they see the electronics and how it works and it's exciting. And it moves very fast, even faster than a roulette table or a baccarat game." Loren Stout, a sales representative for Shuffle Master in Macau, said the transformation occurred when slot machine makers recognized the need to incorporate representations of images significant to Chinese culture onto the machines. "Lemons, oranges and cherries really LONG VIEW Before Las Vegas casinos were built in the past decade, Macau "was a scary gambling den kind of place" that didn't draw tourists, an LV Sands executive says. overtook the teacher. What more is there to gain? Plenty. Macau started out as a dingy, creepy T place. In addition to all the revenue that Las Vegas-based companies have generated for Macau, arguably just as vital, if not more so, is how the Las Vegas branding of Macau has extended much-needed credibility to the peninsula's gaming industry. "It was a scary, gambling den kind of place that had very little tourism from mainland China or any other place in the world except those people who wanted to play, not only in a casino, but in some of the massage parlors," said Mike Leven, president and chief operating officer of Las Vegas Sands and the company's resident expert on the Macau property. "Macau had a reputation for being unsafe." But today, he said, even children visit the Venetian Macau because — just like its Vegas counterpart — it's much more than a casino. It's an integrated resort, with several attractions. And that's what the Chinese government had in mind when it invited foreign competition. | 3 OCTOBER 2011 | he Chinese lust to gamble in a Las Vegas environment resulted in the explosion in gaming revenue that Although the Venetian Macau casino is the centerpiece of the resort — 80 percent of the resort's profitability comes from the gaming area — the strategy of serving a mass market interested in shopping, entertainment and corporate meetings will broaden the company's revenue streams. It's a business plan playing out successfully in Las Vegas, although there are some differences between the tastes of gamblers in the two markets. The Venetian Macau's casino houses 800 table games, dominated by baccarat with $300 Hong Kong-dollar minimums ($38.50 U.S.), in the heart of the house with 3,400 slot machines along the periphery. It's around these tables that thousands of Asian visitors, mostly from mainland China, gather day and night. You won't hear machines screaming out "Wheel! … of! … Fortune!" But there are occasional yelps from the table games when a player beats the bank. On a busy night, the casinos are as wild and boisterous as any place in Las Vegas. In the big casino, the action is frenetic. In the private parlors, it's more subdued and businesslike. Leven estimates that 90 percent of the property's guests are from mainland didn't mean anything to the players," he said. "But that changed when we started putting dragons, butterflies and Chinese symbols in them." "A lot of the slot machines were still in English," Leven added. "In order to maximize interest, more people have to understand it. The common way people who speak English feel is that everybody speaks English, but the reality is that the majority of the market coming into Macau speaks no English." That's a point Grant Bowie, CEO and executive director of MGM Macau, makes when talking about the right way and wrong way of entering into a foreign market. "When the West started this notion of globalization, I don't think they understood that they were going to have to change," Bowie said. He explained that many viewed China and Macau as underdeveloped nations and that the American way of doing things would work there. But they quickly found the Chinese market to be more sophisticated and that they would have to change their focus to attract customers. Now that Macau has commandeered the dominant share of gaming revenue, it's going to work to enhance entertainment, convention and dining offerings. Like Las Vegas, the competing companies in the market are trying different things to see what appeals and catches hold. And, as Bowie noted, the avenue to success will be discovering what appeals to Chinese tourists, not necessarily using formulas that worked in the United States but are marginally adapted to Chinese tastes. Several properties also offer free entertainment, à la Mirage's erupting volcano, Bellagio's fountain show and T.I.'s pirate show performance in Vegas. Millions of square feet of retail, luxury, fine dining and nightclubs also are part of the successful mix. In addition, casino companies have capitalized by drawing major conventions and meetings, including the Asian Global Gaming Expo and Asia's Adult Expo, a gathering of purveyors of adult films and sex toys. Nowhere close to being as racy as the Las Vegas version, the Asian Adult Expo was devoid of nudity and there wasn't an unclothed porn star to be found at any of the booths. Las Vegas-based properties taking the lead. Cotai will continue to expand, and analysts are anticipating what Wynn will do there. The Chinese government isn't S expected to offer any more gaming concessions in Macau, which means Caesars Entertainment may be left on the outside looking in. That company recently announced plans to build a 1,000-room luxury nongaming resort on China's Hainan Island, about 100 miles west of Macau. Like Las Vegas facing challenges from Atlantic City, riverboats and tribal casinos, Macau will likely see competition from other places. Where? "On the basis that I never thought Singapore would ever have gaming, my comment would be: Anywhere," MGM's Bowie said. "It's already legal in Korea and Vietnam, but I think we'll see it in Japan and Taiwan," Las Vegas Sands' Leven said. "I don't think any of these countries wants to miss the opportunity to get the integrated resort concept because they see what it does for tourism and keeping some of their own capital in the country. I don't think there will be massive amounts of proliferation, but the Asian market is so huge." Count on Las Vegas companies being there to foster the expansion, Leven said. Just more than seven years ago, there was no Las Vegas presence in Macau. Today, Las Vegas companies operate 4,665 rooms and suites and have about half of the market's 15,000 slot machines. Steve Wynn has famously said that his is now a Chinese company with a Las Vegas presence. And Macau will only continue to overshadow the Las Vegas Strip. 19 o where will things go from here? Analysts say Macau will continue to grow with the