Two steps forward, one step back. Like so many industries, the gaming industry’s progress on the road to economic recovery has been somewhat arduous. Consumer spending throughout the U.S. continues to fluctuate, and though some American gaming markets are prosperous, others, including Las Vegas and Atlantic City, are still struggling. Thankfully, the latest news and economic data from Asia’s gaming markets represent more than just two steps forward – but, rather, a leap ahead – for gaming.
After a sluggish end to 2008, key indicators signal that Macau’s economy is gradually rebounding. First quarter gaming revenues this year topped $3.2 billion, outpacing earnings from the previous quarter. Also, gaming-related consumer demand in Macau remains high. When City of Dreams (a new mega-resort) opened its doors on June 1, more than 40,000 visitors celebrated its inception. In addition, some economic analysts believe that long-frozen capital markets – which have stalled several gaming development projects throughout Macau and the rest of the global gaming industry – are finally beginning to thaw.
Elsewhere in Asia, anticipation continues to grow for two upcoming gaming developments in Singapore. The 2,500-room Marina Bay Sands resort – Singapore’s first casino – is on track to open in December. And a neighboring recreational complex – which includes a casino, hotels and a Universal Studios theme park – will be completed in early 2010. Some gaming industry insiders worry that these facilities will rob Macau’s casinos of their patrons; however, history suggests that Singapore’s casinos may actually benefit Macau. When New Jersey legalized gambling in 1976, Atlantic City’s casinos spurred renewed interest in gambling and exposed a whole new audience to this unique form of entertainment, and business in Las Vegas quickly grew.
Though the outlook is optimistic for Asian gaming markets, the region is not without its challenges. Tightened visa restrictions on travel from mainland China to Macau continues to impede tourism and hurt the city’s economy. Unfortunately, there is no indication that Beijing officials will ease those restrictions in 2009. Further, gaming leaders and developers are eyeing several untapped gaming markets – including Korea, Japan and Thailand – but thorny political issues have expansion on hold for now.
And yet, despite these challenges, Asian gaming markets are surviving – even thriving – in these difficult times. That achievement is due in no small part to the ingenuity and entrepreneurial spirit of gaming industry professionals – traits that were on full display at G2E Asia earlier this month. Approximately 4,300 gaming industry representatives from across the region participated in the annual trade show and convention, where they shared new ideas, made important transactions and acquired tools to help them weather the current economic storm.
Looking to the future, many G2E Asia participants expressed a desire for Macau to expand beyond gaming. Retail sales there were up 9 percent during the first quarter of 2009, indicating that nongaming amenities have significant earning potential. Because Asian markets are complex and stratified – including a wide range of consumers with varied interests – diversification is crucial to the future growth and prosperity of gaming throughout the region. Attracting a broader range of visitors to Macau and other gaming destinations will require considerable time and investment; it took nearly 10 years to establish Las Vegas’ reputation as a city the offered a variety of attractions beyond casinos. However, judging by the spirited discussions about this issue at G2E Asia, Macau’s gaming leaders are headed in the right direction.
Ultimately, though it is difficult to predict precisely what the future holds for Macau and other Asian gaming markets, the immediate forecast looks bright. And, as the global gaming industry continues to trudge ahead on the road to economic recovery, the good news from Asia serves as a reminder that better days may be just around the bend.