I have devoted many pages in this publication to discussing the latest news about the U.S. commercial casino industry. This month, however, I would like to turn my focus overseas, reflecting instead on the state of play abroad. During these challenging times – when nearly every U.S. gaming jurisdiction faces an arduous road to recovery – some global gaming markets represent significant bright spots for our industry.
The rapid approach of Global Gaming Expo (G2E) 2009 serves as a reminder that gaming truly is a global community. Each year, G2E draws several thousand international attendees, representing 89 countries last year alone.
This year’s event once again will convene a diverse group of international participants. At press time, 23 percent of the show floor – more than 59,000 square feet – already has been dedicated to exhibitors based abroad. G2E provides the leaders of the global gaming industry with invaluable opportunities to discuss the latest gaming issues and trends with their colleagues all over the world.
After all, the international gaming landscape has changed considerably during the past year. And there is much to learn from the recent struggles and triumphs of the global gaming community.
In Russia, the casino boom recently came to an abrupt end. After the 1991 Soviet collapse, gaming establishments multiplied and slot machines quickly spread to shops and malls. In 2008, the gaming industry provided 400,000 jobs and generated an impressive $3.6 billion in revenue.
However, the future of Russian gaming was threatened in 2006 when the government, led by former president Vladimir Putin, made an ill-informed claim about the effects of gambling, calling it the “alcoholization” of the country. The anti-gambling movement began to gather steam, and, this summer, Moscow authorities issued a near total ban on gambling activities. Though an underground gaming industry continues to thrive, unfortunately, most – if not all – legitimate gaming companies no longer operate in the region.
In Asia, gaming has experienced both growth and contraction throughout the past year. For example, though Macau, the world’s largest gaming market, enjoyed a prosperous start to 2008, the global economic crisis took a tremendous toll on the city’s casinos as the year came to a close.
In addition, tourism to Macau stalled, due in large part to tightened visa restrictions on travel from mainland China. As a result, the city’s efforts to attract greater numbers of middle-class, mainland Chinese tourists were significantly hindered. Gaming revenues tumbled, and unemployment numbers soared. In fact, from November 2008 through June 2009, gross gaming revenues on the island decreased month after month.
This summer, however, the tide abruptly turned. Macau shocked economic analysts by earning record profits for August, raking in $1.34 billion. That record was shattered only one month later, when revenues reached $1.38 billion in September, a 53 percent jump from September 2008. Without question, Macau’s roaring recovery is the result of Beijing officials’ decision to relax visa restrictions. As of August, residents of Guangdong province now are permitted to visit Macau once a month versus only twice a year.
In Singapore, work on two multi-billion dollar integrated casino resorts – the country’s first gaming establishments – is nearly complete. The 2,500-room Marina Bay Sands Resort & Casino, as well as Resorts World at Sentosa – a recreational complex that includes a casino, hotels and a Universal Studios theme park – will be completed in early 2010. Both establishments are expected to perform extraordinarily well, likely earning Singapore a place in the top echelon of Asian gaming markets.
In Latin America, gaming markets in a number of countries are demonstrating tremendous promise. Unlike the U.S. and Asia, Latin America’s casinos have not been significantly impacted by the global financial crisis, and gaming continues to expand at a break-neck pace. Excitement within the global gaming community is fervent about the opportunities provided by this burgeoning gaming region.
Currently, Chile and Argentina are leading the way; they have the most mature gaming operations in Latin America. In fact, according to the latest figures from the Superintendent of Casinos and Gambling, gross gaming revenue in Chile for the first half of 2009 jumped a dramatic 78.1 percent when compared to the same period last year.
Gaming also is on the rise elsewhere in Latin America. In Mexico, gaming industry insiders are awaiting new legislation to clearly regulate Class III games, which could spark explosive growth throughout the country. In Brazil, legalized gaming may soon become a reality with the advancement of Bill 2245, which would allow for 1,000 new bingo halls across the country.
Here in the U.S., the commercial casino industry has experienced the most challenging year in its relatively young history. Nearly every gaming market has been impacted by the drop in consumer discretionary spending brought about by the economic recession. Nevertheless, the industry continues to create jobs, tax revenue and opportunities for local businesses that are needed now more than ever. Though it may be facing significant obstacles, at its core, the industry remains strong.
While some economists have declared the recession over, key economic indicators portend a slow and difficult recovery process for the U.S. economy, and thus for our industry. As long as consumer discretionary spending remains depressed, the commercial casino industry and others like it will be challenged.
In times like these, we need an event like G2E to bring the global gaming community together to share the ideas, technology and best practices that will propel us forward. Innovation – which will be on full display at G2E – is crucial to the future prosperity of gaming in the U.S. and abroad. Agility also is an essential ingredient for success. Ultimately, those who don’t adapt, change and innovate are destined to be left behind.
The U.S. commercial casino industry has a long way to go to fully recover. However, we will continue to evolve and to maintain a focus on the future. And, with the help of events like G2E, we will continue to deliver an entertainment product that is unsurpassed both here in America and around the world.