125
Lerner notes: “Las Vegas Strip baccarat gains are likely A January RRR increase (which was followed by another in-
a function of inbound play from China where high rollers crease last week) was the first since June 2008 which then
have enjoyed the benefit of material real estate and stock capped a cycle of 20 increases totalling 1,050 bps beginning
market gains in 2009. in mid-2006.”
Lerner fears that as China makes moves to tighten lend-
Baccarat win amount - Las Vegas Strip
ing criteria here will usher in a reduction in overall liquidity
that will feed all the way to high-end play in Macau and Las
180000
Vegas.
160000
140000
“It seems logical to anticipate additional tightening in
120000 2010 in order to remove additional liquidity from the system,
100000
and ultimately moderate growth,” he said.
80000
60000
Such a move should cause concern to Las Vegas opera-
40000 tors who have been gearing up for more not less Asian play.
20000
0
The recent opening results for MGM Mirage’s US$8.5
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec billion CityCenter were anchored by strong baccarat play,
with more than US$42 million of the estimated US$56 mil-
2008 2009
lion in gambling revenue generated by their Aria casino in
the two weeks after its December 16 opening coming from
“We are concerned about the impact that monetary pol-
baccarat, according to Lerner.
icy changes in China will indirectly have on this Las Vegas
It is thought likely that the strong volumes continued
play, especially if there is a lag in recovery for Vegas’ other
through the recent Chinese New Year celebrations.
segments.”
And while many of Sin City’s smaller casinos are reluc-
Watchers of China’s central government policy state-
tant to risk the exposure that big losses to high roller players
ments can find contradictory signs as to what will happen
could mean to their bottom lines, other mid-tier properties
next.
are busily stepping up to capture some of the action.
Only late last month a statement issued after a Politburo
An integral part of the Hard Rock Hotel’s recent US$770
meeting chaired by President Hu Jintao suggested that “Chi-
million (MOP6.16 billion) hotel and gaming floor expansion
na will continue to maintain the continuity and stability” of
has been targeted at attracting Asian players, with a new, qui-
current policies, believing that the economy had not yet fully
eter table area, and additional facilities for customers who
emerged from its downturn.
may not be the multi-million dollar players courted by MGM
The announcement came in the run up to the important
and Wynn but will still play for considerable amounts of be-
National People’s Congress, the annual meeting of parlia-
tween US$50,000 and US$500,000 per hand.
ment, but at the same time Central Bank officials have been
The trend to courting Asian customers is certain to con-
indicating with their actions that they would like to see a
tinue while there is still momentum in the baccarat boom,
cooling of the credit boom in China.
but observers of the Las Vegas scene will be watching nerv-
Union Gaming’s Bill Lerner observes: “China’s central
ously for any signs at all that their wealthy Mainland Chinese
bank recently began tightening monetary policy via reserve
players are feeling the pinch.
requirement ratios (RRR) in order to slow exploding growth.
*GamblingCompliance/Macau Business
March 2010
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