Analysis SOUTH EAST ASIA
Where East beats West
The Asian gaming market has outstripped Europe and is predicted to overtake the US by 2015. G3 takes an in-depth look at a region that’s dominating the global gaming industry
Frank Fahrenkopf held his audience in the Venetian Ballroom in Macau rapt as he delivered the American Gaming Association's annual overview of the South East Asian marketplace at the fifth G2E Asia show in Macau. Press from Macau, South China and Hong Kong buzzed the lectern, hung on every word and cracked paparazzi flashbulbs in what seemed to be an attempt to cause epileptic fitting.
Roll back 12 months and the combined press had a single desperate question for Mr. Fahrenkopf: "Would Singapore eclipse Macau, take its players and steal its SE Asian gaming crown?" This year the question was the same, asked three different ways, imploring the AGA chairman to once again dispel their fears. Which of course he did, though his figures continued to cause consternation. Singapore he explained had not overtaken Macau, but those two casinos in a little over 12 months were about to vault past Las Vegas and become the world’s most profitable casinos.
Mr. Fahrenkopf reassured that Macau was now four times the size of Las Vegas and breaking revenue records every month. Macau last year generated a GGR of US$23.5bn, Singapore meanwhile has seen 25 per cent growth in 2011 to $6.4bn. In 2006, Macau overtook Las
Vegas as the largest single gambling market in the world. Last year, it earned four times as much. This year, it could be five times greater than Vegas.
Frank Fahrenkopf, AGA Chairman.
The US casino industry accounted for 57 per cent of the global market in 2009 with revenues of $57.2 billion (40.6bn euros) while the Asia-Pacific market was worth $21.8bn. That was before Singapore opened its casinos (which made more than $5bn last year) and new properties opened in Macau, including the new Galaxy Resort on May 15. Casino gaming revenue across Asia-Pacific jumped 27.7 per cent in 2010, compared with just 2.7 per cent growth in the US. Between 2010 and 2014, gaming revenues in the region are predicted to grow at an average of 23.6 per cent per year.
Marcus Prater, AGEM.
By 2014, Macau alone will generate $45bn in gambling revenue, three times the size not of Las Vegas, but of Nevada, while Singapore’s revenues could hit $8bn, up from zero before 2010. There are, of course, challenges facing the Macau market in terms of labour shortages, a cap on the number of gaming tables and the threat of restrictions on junket operators. However, Marcus Prater of AEGM put all of this into context at G2E Asia by detailing the numbers now generated by the Macau market.
Mr. Prater described the table and slots market in Macau as an ever increasing number scale since the emergence of the Cotai Strip in 2008. At that time slots and multi-players generated 5.65bn MOP, around 690m US dollars from a total of
G3 I AUGUST 2011 I PAGE 26
11,50 units in the market - while baccarat generated 95bn MOP - 11.65bn US dollars. In 2009, slots increased to 14,363 units generating 6.5bn MOP, while baccarat generated 105bn MOP. In 2010, these figures increased yet again, with 14,050 slots delivering 8.6bn MOP or US$1.06bn, a 33 per cent increase on the previous year, breaking the 1bn US dollar revenue barrier for the first time in the Macau slots market. This year, based on the first quarter from 13,787 units prior to the Galaxy Resort opening, the figure is on target to reach 10.9bn MOP or US$1.34bn, a 26 per cent increase on 2010.
It’s important to note that the slots figure this year will be twice that of the figures from 2008, doubling revenue in three years. Baccarat, meanwhile, is on track to
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