The Macau Money Mint Maybe – faltering?

An employee counts Yuan banknotes at a branch of Industrial and Commercial Bank of China in Huaibei, Anhui August 3, 2010. REUTERS/Stringer

Yesterday I was ranting about a diplomat meddling in business in Macau, opining that diplomats ought to be meeting with political not business leaders.  However, today while reading some news from Macau I decided he may know much more about Macau that I; there may be some dark clouds on the horizon.   And those clouds could yet create a role for him; he could help negotiates with foreign countries for a “most privilege” status for casinos and their representatives in their efforts to gain a better foothold around Asia.

The news from Macau today: First, the visitation numbers for August and 14 percent more people visited Macau in 2010 than visited in 2009 – good news right?  Not quite, visitors from mainland China increased by 20 percent in August, but visits by non-Chinese declined; 1.3 million Chinese went to Macau, but less than 100,000 visitors came from Korea and Japan combined.

Second, Sands China is opening three sales offices in India – to recruit high-rollers, you ask?  No, the announcement says the Sands will be focusing on families, positioning its Macau properties as a family destinations.  And third, the partnership between James Packer and Lawrence Ho – both coincidentally the very rich sons of very rich gambling fathers – operate a casino in Macau – City of Dreams; they recently spent a couple of hundred million dollars to expand the property and add a water attraction – House of Dancing Waters – Ho called it the most exciting entertainment attraction in the world, possibly a small exaggeration, but I haven’t seen it, so I can’t say.  The House of Dancing Waters is intended to broaden the City of Dreams’ demographic appeal – and you guessed it create a family destination.

For a couple of years we have been told every month how Macau was growing at an unimaginable rate; Macau was soon to, oops already has, surpass the Las Vegas Strip as the most lucrative gambling destination in the world; adding all of the non-Chinese people living in Asia to 1.3 billion Chinese (20% of the world’s population) and there would be no end to growth or the profits for casinos in Macau. But now it seems Macau needs the Indians (17% of the world’s population) to help out.  And even that may not be enough, 37 percent of the world’s population apparently does not have enough gamblers to feed the casinos in Macau and it is necessary to reach deeper into the population and draw families to fill in when the high-rolling Chinese gamblers aren’t putting up enough money.  Doesn’t sound like unlimited growth potential to me, especially given Singapore has two casinos and both India and Japan are inching closer and closer toward having casinos of their own.


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