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Integrated resorts need local gamblers

But before getting to the product mix, those hoping to develop integrated resorts need to know that the authorities are on the same page

The determining factor in setting up a large-scale integrated resort in a region is whether its locals will be able to gamble; in the event that they can’t, companies such as MGM Resorts will focus their interest elsewhere, says the company’s Senior Vice President of Global Gaming Development, Ed Bowers.
“If you go a foreigners-only route the maximum amount of investment you can get is in lower hundreds of millions (U.S. dollars) and that would be in a good market with good access to an airport,” commented the Senior VP. On the contrary, points out Bowers, “If you allow locals to go to the casino your investment level is numbered in the billions. The more you’re able to spend on the project, the greater opportunity you have to attract from further abroad,” he stated at yesterday’s Global Gaming Expo (G2E) Asia.
The product mix, however, would be different for casinos that are also catering to locals, he points out.
“The local casino visitor is coming regularly. It’s not necessarily a one-off and exceptional event where people are prepared to pay extra for things,” he points out, noting in particular that “the range of amenities is also important […] that there are things people would normally do – so you see significant demand of bowling products, of movie theatres – and these are not typically what you’d see in the more international foreign destination casinos,” notes the Senior VP.
However, before getting to the product mix those hoping to develop integrated resorts, such as MGM’s interest in Japan, need to know that the authorities are on the same page.
“Essentially with all of these gaming development projects it all starts with public policy and the governments need to have a clean and transparent view on issues around gaming in order to have clear public policy – that policy drives the direction they want to go,” notes Bowers giving the example of Singapore noting it was a “clear, transparent process led from the top with great political leadership and it was a huge success”.
This would then be the crux of the group choosing to operate or not in the Japan market,
“I don’t think that you can develop any large scale integrated resort that’s a foreigners-only casino; it just doesn’t make any sense,” said Bowers. “Frankly, MGM can’t build a casino that costs less than a billion dollars; we’ve proved that time and again”.
This allowance of locals to gamble also depends upon what the government itself hopes to get out of introducing gaming to the country, as he points out, saying, “I’m spending a lot of time in Japan at the moment”.
“I think what they’re looking for there is economic growth and a continued growth in tourism in particular. And for the 2020 Olympics,” he notes of the government’s potential viewpoint.
“Other markets seem to regenerate communities, and create investment and even jobs. I think that is maybe part of the story in Japan but it’s not the entire story,” Bowers concluded.