Analysis
SOUTH EAST ASIA
G2E ASIA SEES 25 PER CENT GROWTH IN ATTENDANCE The fifth annual G2E Asia welcomed more than 5,700 gaming industry professionals from around the world, surpassing attendance at last year’s event by 25 per cent. These figures, released by G2E Asia organisers Reed Exhibitions and the American Gaming Association, reflect the continued expansion of gaming throughout the Asian region. G2E Asia is now double the size of the inaugural show held five years ago.
Event attendees hailed from 59 different countries or regions, including Japan, Taiwan, South Korea, Malaysia, Vietnam, Thailand, Laos, Indonesia, India, South Africa, the United Kingdom and the United States. In particular, the number of attendees from Australia, the Philippines, Singapore, Cambodia, China and Macau increased significantly when compared to last year’s event.
“The continued growth of G2E Asia is a testament to the increasing success of the Asian gaming markets,” said Frank J. Fahrenkopf Jr., president and CEO of the American Gaming Association. “With Asian gaming growing and evolving at such a rapid pace, it has never been more vital for those in the region to anticipate the trends and harness the innovations that will grow their business and distinguish their properties against an increasingly high level of competition.”
the VIP sector. However, the government is worried that rules are not being followed and that commission paid to junketeers is being flouted, raising concern in financial markets that fear government intervention and reprisals. As many of the companies are listed on the HK exchange, uncertainty in the stock market could affect long-term financial prospects for investment in the region if the uncertainty isn’t resolved quickly.
MACAU - INFINITE GROWTH? Galaxy Entertainment’s Francis Lui was recently asked if he had international ambitions - “Why?” he retorted. “I have a target market of 65 million people just a three hour drive away in Guangdong province. I’m Chinese and I know this market. My aim is to become Macau- centric - a specialist in this market.”
hit US$26bn, 19 times more revenue than slots, though slots have kept track with the phenomenal baccarat growth.
There is obviously a long way for slots to go to catch table gaming, but gaming machines are certainly holding their own in the Macau market. Competition among slot manufacturers, however, hasn’t changed noticeably in recent years. Aristocrat Technologies continues to maintain 60 per cent of the Macau market. IGT, WMS and Bally have secured around 10 per cent each and the remaining manufacturers share the last 10 per cent amongst themselves.
In the tables sector, junket operations account for 60 per cent of GGR in Macau, while this figure rises to 70 per cent in
There were initial fears that the meteoric rise of gaming in Macau and, more recently, Singapore could lead towards market saturation; even in a region where the appetite for casino entertainment is insatiable. Sheldon Adelson, Chairman and CEO of Las Vegas Sands, dismissed those fears by stating at the G2E Asia award ceremony that the region has room for “five gambling centres the size of Las Vegas” and predicts that growth in what he describes as a “supply driven industry” will “explode, rather than just grow” in the future.
Sheldon Adelson,
Chairman and CEO Las Vegas Sands.
Confidence in the Macau market to achieve consistent growth hasn’t always been so unfaltering. In 2008, at the height of the economic crisis, Sands laid off 11,000 construction workers in order to mothball the development of its Cotai land parcel 3 and 4. Today, however, with plans to open parcel 5 by the end of the first quarter 2012, Sands China has had to patiently wait for workers to complete the Galaxy Macau, before construction can
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begin. Operators must employ four domestic Macanese builders for every foreign construction worker, which means that currently there aren’t enough domestic builders to meet the demand. The new hotel blocks being added to the Galaxy Resort are in the same position - on hold due to lack of physical labour.
“We are talking about opening a portion of site 5 by the end of 2011 and right now it looks like we can open it as planned," commented Las Vegas Sands president and chief operating officer, Michael Leven. Sands China is considering opening the entire site 5 at one time and that would be in the middle of the first quarter of 2012. “We feel pretty confident that we can open all of site 5 by the end of the first quarter of 2012,” he added.
Venetian 5, Sheraton and Shangri La were known to be placing orders during the G2E Asia show in June. Las Vegas Sands, however, has since terminated its hotel- management agreement with Shangri-La International for the new casino resort development being built on plots 5 and 6 in Cotai. Las Vegas Sands is now thought to be in talks with InterContinental Hotels to manage the two hotel towers at the US$4.1bn Cotai development.
Sands China was also thwarted in its plans to develop plots 7 and 8 on Cotai thanks to an intervention by Macau’s Land, Public Works and Transport Bureau. DSSOPT director Jaime Carion said in December 2010 that plots 7 and 8 in Cotai would not be granted to either gaming operators SJM Holdings or Sands China. After the government snub, Las Vegas Sands (LVS) dropped its interest in developing plots 7 and 8. “If somebody else builds on 7 and 8, I will be happy. Happier than if I were going to build on it,” said Mr. Adelson at a meeting in January of this year.
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