In June, Macau casinos took in about $2.6 billion in revenues, an increase of more than 50 percent from the previous year. This achievement highlights the dominant place that Macau has taken in the gaming world, and is another reminder that Las Vegas isn’t what it used to be … and that’s not necessarily a bad thing.

via Las Vegas Business Press :: David G. Schwartz : Slip in gambling rankings not bad thing for Vegas.

It’s been a while since Macau knocked Las Vegas out of that number one spot, but I really think it has just begun to sink in. Hopefully now we can start moving forward, to whatever the future holds.

Today, gaming is a truly global industry. Casino gaming, which was once a small-scale business confined to a limited number of jurisdictions, has blossomed into a multibillion-dollar enterprise with numerous competing markets. This not only means that gamblers get their pick of where they want to play; it also means that states, nations and special administrative regions compete with each other by offering regulatory regimes that best suit the growth of casinos.

Nevada, whose current regulatory regime is the longest-lived of the major gaming markets, may have some historical lessons for jurisdictions on the rise, particularly when it comes to the role of transparency in promoting the public—and investor—trust in the gaming industry.

via Gaming Regulations: Evolution and Transparency | Global Gaming Business Magazine.

Can you tell how eager I am for Singapore to start releasing monthly, or at least quarterly, revenue data?

That was a fun piece to write because it made me think about how Nevada, Macau, and Singapore are similar and different. It wouldn’t make sense to impose Nevada’s regulatory system top-down on other jurisdictions, but at 80 years it’s got the longest history of modern regulatory regimes (though Macau has had legal commercial gambling since the 1850s), so there are definitely going to be some lessons there for everyone.

In today’s flurry of email headlines (which continue whether I’m in the office or not) I read a blurb saying that Wynn Resorts “has become”; a Chinese company. Certainly this is no surprise to Wynn. I remember him saying that as far back as 2005, though then it was more along the lines of, “One day Wynn Resorts will be a Chinese company.”

Of course, this is getting press now since it’s being coupled with his criticisms of the Obama administration, but looking at the numbers, it’s clear that Wynn Resorts has been a predominantly Chinese company for quite some time.

via Wynn’s a Chinese company, now more than ever | Two Way Hard Three | Las Vegas Casino & Design Blog | from ratevegas.com.

Check it out, if only for the neat little charts. I managed to cut out one step in producing those charts, so I’m pretty excited about them.

In his State of the State address, Nevada Gov. Brian Sandoval briefly noted the necessity of updating the state’s gaming regulations to reflect the new realities of 21st century gambling. It’s a good message to share and it highlights the work the industry and its regulators have done to keep moving forward.

Sandoval highlighted the need for “a flexible environment for the technological resources that are the underpinning of modern gaming devices,” suggesting that the recent forays into mobile gambling — courtesy of dedicated devices developed by Cantor Gaming and applications that run on smart phones, one of which recently gained board approval — will continue. With commerce and information-sharing migrating from brick-and-mortar to Internet to mobile, it makes sense that more people are going to want to gamble using these technologies.

via Las Vegas Business Press :: David G. Schwartz : As gambling shifts, state must be ready to adjust.

The importance of modernization was really driven home last Friday, when I went to the opening of Cantor Gaming’s new sportsbook at the Tropicana. Cantor is moving aggressively into mobile sports gaming. In addition to their dedicated devices, which you can already get at the M, Venetian/Palazzo, Hard Rock, Tropicana, and Cosmopolitan, Cantor is developing apps that run on smart phones and tablets.

Casino revenue in Macau, the world’s biggest gambling hub, may climb 30 percent to $30 billion this year as visitors from mainland China increase, CLSA Ltd. said.Billionaire Stanley Ho’s SJM Holdings Ltd. was also upgraded to “buy” from “outperform” with a new share-price estimate of HK$18.40 at CLSA, according to a note to clients from Hong Kong-based analysts Aaron Fischer and Huei Suen Ng. The brokerage earlier predicted Macau casino gambling growth of 20 percent for 2011.

via Macau Casino Revenue Forecast Raised to 30% by CLSA, Spurring Stock Rally – Bloomberg.

That’s a bullish outlook, but one that’s justified by Macau’s growth to date and the potential for this year. I wouldn’t be surprised to see Macau triple Nevada’s gaming revenues with one-tenth its casinos.

Its been fascinating watch Macau equal, then overtake, Las Vegas as the world’s casino gambling capital. I think this is probably the biggest development in the gaming world in the 2000s.

That gives me an idea: if I have the time, I might put together an article about the ten biggest developments/news stories of the decade 2000-10. Here’s a tentative list, just off the top of my head:

1. Macau
2. Wynn sells Mirage
3. Consolidation on the Strip
4. Wynn Resorts is born, grows
5. The 2004-7 bubble
6. Atlantic City implodes
7. California Indian casinos grow
8. Mid-Atlantic casino proliferation
9. The recession
10. Online gaming’s halting progress

A Malaysian maid working in Hong Kong has reportedly won over HK$30mil RM12mil in a local lottery, China Press reported.The middle-aged woman is a helper at the mansion of Angela Leong, the fourth wife of casino tycoon Stanley Ho, known as the “King of Gambling”.

The woman bought a Mark Six ticket lottery organised by the Hong Kong Jockey Club on her birthday, as suggested by her employer’s family, said the paper.

A member of the Ho family confirmed the news to Hong Kong newspaper Apple Daily.

via Malaysian maid wins RM12mil in HK lottery.

I think that’s somewhere in the range of $4 million US, which isn’t bad. According to the rest of the article, she’s going to keep her job since she’s very attached to Mrs. Leong’s daughter.

Is it ironic that a woman who indirectly works for one of the world’s wealthiest casino owners takes their advice to buy a lottery ticket, then wins? Maybe.

I’m still honing it, so any suggestions are appreciated.

Steve Wynn made headlines when he suggested he might consider moving the headquarters of Wynn Resorts Ltd. to Macau from Las Vegas. As always, Wynn's forthrightness points the way to a larger truth about the future of the casino industry.

Wynn Resorts is a Las Vegas success story. Since moving here in 1967 as a part-owner of the Frontier, Steve Wynn has been one of the city's prime movers.

He began making a mark in 1973, when he became the chief executive officer of the Golden Nugget, then a small downtown casino with no real distinction.

Wynn's aspirations outside of Las Vegas have always been an important piece of the puzzle.

via Las Vegas Business Press :: David G. Schwartz : When Wynn speaks, gaming listens.

I think that many of the so-called pundits have reacted more emotionally than rationally to Wynn lately, particularly since he’s become critical of the current administration, and that’s what’s driving some of the comments out there. We talked about this a little on the latest Vegas Gang.

Wynn’s political opinions and the possibility of his moving the headquarters of his company are, I think, two separate issues. It’s not like he’s threatening to go John Galt on us: he’s just saying that he might move more elements of Wynn Resorts to the city that is its top market. People give another prominent CEO grief for not living in Las Vegas, since that’s where the action is, and by this logic they should be demanding that Wynn spend more time in Macau.

The most fascinating thing about Wynn is that, like Jay Sarno, his career doesn’t have a single, predictable arc. If he did, he’d have just kept expanding the Golden Nugget or, at the very least, staying with that brand. Instead, you’ve had forays into Atlantic City, Mississippi, and Macau, with the sale of Mirage Resorts along the way. All the time, he was reacting to changing conditions. If things had gone differently in Atlantic City, he might not even have built the Mirage, or at the very least would have built it in Atlantic City, and casino history would be much different.

So it wouldn’t entirely surprise me if the next stage of Wynn’s career takes him in a completely different direction. It’s happened before and there’s no reason to think it won’t happen again.

Historians have taken the date 476 A.D. and the deposition of Romulus Augustus, the last Roman emperor, as the “official” date of the fall of the Roman Empire, even though at the time most Western Europeans were too preoccupied with daily survival to take much notice of events in the far-off capital.

When historians look back at the history of casino gaming in Atlantic City, they may decide that 2010 marks the beginning of the end of that city's reign as one of the country's leading gaming destinations, and they might focus on a single event: The decision by MGM Mirage to abandon its holdings in the city after the New Jersey Division of Gaming Enforcement found Pansy Ho, the company's partner in its MGM Grand Macau casino, “unsuitable.”

via Las Vegas Business Press :: David G. Schwartz : The beginning of the end for Atlantic City?.

I don’t think this is hyperbole. The revenue trends are showing a decline that started slightly before the recession that is more due to competition than the economic slowdown, although the recession hasn’t helped. There are real problems in Atlantic City.

Are there solutions? Yes, and they go beyond making Pacific Avenue a one-way street. As I see it, the city has to be reinvented to appeal to two groups: investors, who will buy or build new casinos and attractions, and visitors, who will fill them. These groups aren’t mutually exclusive, but they require different approaches. The average gambler doesn’t really care about how many levels of scrutiny casino vendors go through before they are licensed, but this sort of thing makes a difference behind the scenes.

It’s not impossible. The city’s been through worse, and the right forward-thinking people can help get it on the right track. The time for action, however, is now. If AC just continues to coast for a few years, it may be too late, at least for this generation.

But there is this separate yet equally compelling story about an imminent state monitoring of the city:

State intervention in Atlantic City government could become a reality if the city doesn’t “get its act together” within two to three months, a state senator said Monday.State Sen. Kevin O’Toole, R-Bergen, Passaic, Essex, said he would be willing to push for a state monitor with veto power over City Council minutes if the local government doesnt return to the Senate State Government, Wagering, Tourism & Historic Preservation Committee with a good-faith response to a recent state audit report.State Comptroller Matthew Boxer answered questions and described some of the findings in his offices report on Atlantic City’s fiscal management, which outlined more than $23 million in waste and inefficiency .

via Atlantic City warned to “get its act together” or face state intervention – pressofAtlanticCity.com : Latest News.

This isn’t directly linked to the Division of Gaming Enforcement’s decision re: Pansy Ho, but it shows the heavy hand that state government has in the city itself, not just its biggest industry. And with $23 million in tax money apparently being flushed down the toilet, it’s hard to say that there’s no justification there.

The irony is that, if Pansy Ho had been suitable, MGM Mirage might have found itself doing business in two “Special Administrative Regions.”

I’d guess that, on the strength of the $60 million a year MGM Mirage gets from the Borgata and the value of the real estate the company controls (which I assume would be part of the sale), the company might fetch something $200-$500 million. I haven’t run any numbers to confirm this; that’s just my first impression based on about 6X EBITDA, which is right in the middle of those numbers, with some degree of flexibility for the value of the real estate (on the high side) and the depressed state of the general market (on the low side).

The problem, of course, is finding someone willing to pay big bucks for an asset (albeit the top-performing one) in a regressing market, particularly when the seller is very publicly identified as “motivated.”

Most people are assuming that Boyd will be the suitor, which makes sense, though this wouldn’t necessarily be a bad buy for an equity firm if they went into it with realistic expectations.

It likely wouldn’t be anyone else already in the market, since Harrah’s is already far too exposed in AC, Trump has its hands full with its existing casinos (though 1/2 of Borgata would actually be better than 100% of the Marina right now), Colony Capital has lost one casino to its lenders already, and Carl Icahn’s plate is presumably full with turning around Tropicana Entertainment and the Fontainebleau.

Anyone not in the market would have to do some serious soul-searching about their licensing, since the state has made it clear that they consider no company too big to show the door to. Even if Borgata can retain its market share (which might be difficult when Revel opens), it’s still piece, though a big one, of a nonetheless shrinking pie.

But in the wake of the faltering global economy, Macau is not such a sure bet anymore. The problem is that some of those giants embarked on overzealous building sprees — since 2004, the number of casinos in Macau has more than doubled to 31 — and now the global credit crisis is threatening to topple at least one of them. Adelson's company, Las Vegas Sands, has undertaken an aggressive expansion plan over the past few years, winning the bid to build the $4.6 billion Marina Bay Sands casino-resort in Singapore and developing a $743 million casino-resort in Pennsylvania, among other projects. The credit crisis has left the overextended company in danger of defaulting on $5.2 billion of loans secured by its Las Vegas operations. Last week, the company said it would work towards completing the Marina Bay site, but Singapore's government is making backup plans to enact if the Sands fails to raise the necessary funds to complete construction. Then, on Nov. 13, the cash-strapped company announced that it would layoff up to 11,000 construction workers in Macau, after its decision to suspend work on part of the Cotai Strip — a $12 billion undertaking. On Thursday, Las Vegas Sands' share price closed at $5.58, down 95% from its peak last December.

Dark Days Ahead for Asia’s Las Vegas? – TIME.

If you factor out the visa restrictions and other extrinsic factors, it’s hard to argue against Macau’s growth in the long term. Of course, all those extrinsic factors are what makes Macau…Macau.

I just wish that we could get stories weren’t so extreme. It’s always “this is the best every” or “things can’t get any worse.” Usually, though, things can get better, and of course things can always get worse.

But I doubt you’ll see a story whose gist is: Macau is a promising market but it’s currently got challenges that only smart operators will be able to overcome. It’s too nuanced, and it probably requires too many value judgments.

Its construction involved filling in the sea between two of Macau’s islands to recreate the Las Vegas strip, and then carefully cutting out tiny canals to provide at least a hint of Venice. On August 28th the Venetian Macau, the world’s biggest casino, opened its doors to an ocean of people eager to get to its tables.

A packed ceremony in the casino’s 15,000-capacity arena culminated in Diana Ross singing “Ain’t No Mountain High Enough”—reflecting, perhaps, the hopes of both the gamblers with their stacks of chips, and the firm behind the casino, Las Vegas Sands. It would be hard to find a project more amenable to hype, or an industry less shy about disclosing its extravagance. The enormous building, Asia’s largest, required 20,000 construction workers and 3m sheets of gold leaf. Running it takes 16,000 employees and enough power for 300,000 homes. Construction costs swelled from $1.8 billion to $2.4 billion—more, the South China Morning Post pointed out, than Macau’s entire public-works budget for the past five years.

The Venetian has 870 tables and 3,400 slot machines in the world’s largest gambling hall, which is encircled by 350 shops, more retail space than any Hong Kong mall. That is also over twice as many tables as existed in all of Macau in 2002, when a local monopoly was broken and the Las Vegas operators were allowed in. This brought together American firms, with their business plans and architectural schemes honed in Nevada, and enthusiastic Chinese punters. Macau’s old casinos could not compete. Las Vegas Sands opened its first casino in Macau in 2004, and it became profitable overnight, as did casinos opened by fast-moving rivals. Investors took a while to understand the market’s potential, but between late 2005 and early 2007 shares in Las Vegas Sands doubled.

Chinese gambling | Macau wow | Economist.com

Is the Venetian really the largest building in Asia? I’m not saying it isn’t, but that’s a pretty grand claim.

I don’t even want to think about how they do table drops for 870 games. The next time I’m over there, I’ve got to get a tour and see how they can get a place that big to work. Scheduling dealers alone must be quite a task.

I wonder what Venetian Macau would have cost to build in Vegas? Considering that it was cheaper to build than Wynn Las Vegas and much bigger, I’m guessing that the costs might be prohibitive.

Hunter S. Thompson would have found much to fear and loathe in Macau, the former Portuguese colony rebranding itself as a gambling paradise. The good doctor (rest his soul) would have been vexed to discover that Macau, surrounded by water and crowded immigration checkpoints, is best entered by ferry, not gas-guzzling Caddy. No doubt he’d have been dismayed to learn that since Macau’s 1999 return to Chinese rule, hallucinogenic substances aren’t easily procured. But then again, when you can gaze at the Grand Lisboa casino, the newly built neon orb that throbs and pulses at the edge of the Macau peninsula like the Technicolor egg of some gargantuan radioactive monster, who really needs peyote?

Indeed, Western gamblers looking for something more exotic than Reno or the Riviera are in for a bit of a shock when they arrive in this smog-shrouded enclave. In Macau’s city center, the pastel façades of Senado Square and the ruins of St. Paul’s cathedral evoke Macau’s four centuries under Portuguese rule. But the frenzy of development elsewhere lends this Old World city the feeling of a frontier boomtown (albeit a relatively sober one: Macau’s hard-core gamblers prefer tea to liquor).

While Macau is now the world’s gaming capital last year revenue surged 22%, to $7 billion, vaulting the city ahead of Vegas – there are just a few decent restaurants and not much in the way of shopping or shows to speak of (yet). Still, Macau is a fascinating place to watch some of the most intense gambling around, both at the baccarat tables and amid vast, dusty construction sites, where high-rolling developers are betting billions.

The island was closed to all foreign competitors till 2002, when Beijing stripped local tycoon Stanley Ho of his monopoly over the island’s gambling concession, which he had held for 40 years. Faced with new competition, Ho (who also controls the lottery, dog and horse racing, the ferry and helicopter terminals, and the city’s largest land bank) rushed to gussy up some aging properties and build new ones. On a recent visit to his newest, the Grand Lisboa, a troupe of Russian street players performed slapstick routines beneath crystal chandeliers in the front lobby, while on the gambling floor upstairs, a trio of cabaret dancers shimmied in front of a giant oval of orange jade.

Ho’s offspring have also benefited from the boom: His son Lawrence partnered with James Packer, Australia’s richest man, and in May they opened the $500 million Crown Macau on the island of Taipa. MGM Mirage, owner of Las Vegas’s Mirage and Bellagio casinos, has teamed with Ho’s daughter Pansy to build a 28-story, 600-room hotel and casino set to open later this year on the waterfront.

Vegas entrepreneur Sheldon Adelson, however, is making the biggest wager that visitors here will want to do more than just gamble. After recouping his $240 million investment in the Sands Macau in just eight months (the cavernous casino set the world record for the largest number of gaming tables under one roof), he’s getting ready to throw open the doors of another Vegas outpost, the $2.2 billion Venetian Macau, on Aug. 28. The Venetian is the first phase of a truly mammoth complex slated for completion next year, which will include 20,000 rooms operated by five luxury hotel chains such as Four Seasons and Raffles. This so-called Cotai Strip (named for a bit of reclaimed land between the islands of Coloane and Taipa) will feature hundreds of yet-to-be-named restaurants and boutiques; a labyrinth of exhibit halls, performance stages, and conference rooms; and three Venetian-style canals plied by authentic Italian gondolas. The whole shebang will be sheathed in an air-conditioned biodome.

Around the perimeter of Adelson’s complex, Packer and Lawrence Ho have begun construction of City of Dreams, a giant casino and underwater theme park. Nearby, another group is building Macau Studio City, a casino-cum-multimedia-center that will include a boutique hotel designed by Shanghai Tang founder David Tang.

Macau now – July 9, 2007

It’s interesting to see how the idea that Macau is the leading gaming destination in the world is slowly filtering into the mainstream. I wonder if 10 years from now anyone will even have to say it.

MACAU says it has overtaken the Las Vegas Strip as the world’s biggest casino draw, raking in more than US$7 billion ($8.58 billion) in 2006.

The tiny southern Chinese enclave’s 22 casinos generated 16.7 billion patacas in the final quarter, taking the year’s total gross gaming revenues to 56.2 billion patacas ($8.83 billion).

By comparison, the 40-odd casinos on Las Vegas’ famous main strip – including the plush Venetian and MGM resorts – generated $US6.6 billion ($8.09 billion).

Macau’s renaissance from a crime-ridden territory with an ailing gaming sector was led by the Las Vegas Sands company, which opened the Macau Sands in 2004.

Other big American names to have taken advantage of the relaxed regulatory environment are Steve Wynn’s resorts and MGM.

Australia’s Crown casinos and Hong Kong’s Galaxy have also opened gaming centres.

Analysts tipped in October that the city had overtaken Las Vegas, based on earnings projections.

But today’s GDP figures are the first time that city officials have confirmed the historic development.

Gambling earnings have boomed in Macau since 2001 when the Government ended tycoon Stanley Ho’s 40 year monopoly on casinos in the city and allowed foreign operators to move in.

Macau punts Las Vegas in casino stakes | NEWS.com.au

There’s one thing I found very interesting: that in Australia, the Venetian and MGM are considered the major Strip casinos.

Another is that I wouldn’t describe Macau’s pre-2002 gaming sector as “ailing.” I’m going to quote from Roll the Bones here:

Rising from around 30% of the public revenue to nearly two-thirds of it, STDM’s gaming taxes kept Macau’s administration afloat throughout the 1980s and 1990, when Stanley Ho’s enterprises contributed around 80% of Macau’s tax revenue.

I don’t have the absolute revenue numbers at my fingertips right now, but that sounds to me like Uncle Stanley wasn’t losing any money on his casinos.

And congratulations to Hunter at Two Way Hard Three, who has the top Google result for “macau gaming revenues.” I can boast the top result for “casino carpet.”

Thousands of gamblers on Sunday jammed into a new casino owned by a local billionaire who is trying to fend off an invasion by Las Vegas tycoons who have been gobbling up market share in the booming Chinese territory of Macau.

Many of the punters who crowded into the Grand Lisboa _ shaped like a huge lotus flower covered in blinking lights _ were big-betting mainland Chinese who helped push Macau past the Las Vegas Strip last year as the world’s gaming center.

The five-floor casino is owned by Hong Kong billionaire Stanley Ho, who held a monopoly on gaming in Macau for four decades until 2002. The former Portuguese enclave _ two islands and a peninsula off China’s southeastern coast _ is the only place in China where casinos are legal.

In the past four years, some of the biggest names from Las Vegas _ Las Vegas Sands Corp.’s Sheldon Adelson, Wynn Resorts Ltd.’s Stephen Wynn and MGM Mirage Inc. _ have been aggressively building casinos, luxury hotels and mega resorts in Macau.

Before he opened the 3 billion Hong Kong dollar ($384 million) Grand Lisboa on Sunday, the 85-year-old Ho acknowledged that his market share slipped to 63 percent last year, and analysts widely agree that it will erode further. But Ho, who has 17 casinos in Macau, said his new flagship Grand Lisboa would compete well with the Las Vegas-style casinos because of his long experience in the market.

“We are the leaders, not the followers,” he said. “We know the city well.”

Ho is battling a common perception that his casinos are stodgy, smoky and plagued with surly service.

His new five-floor casino was decorated with plush red carpet and silver light fixtures with strands of crystal beads. The gaming floors have 240 tables and 484 slot machines.

The 52-story building _ with a 430-room hotel that opens later this year _ has a round base that looks like a giant Faberge egg covered in lights the flash red, green and gold. The design of its tower was inspired by the long plumes of a Brazilian showgirl’s headdress. The lobby is decorated with 580,000 Swarovski crystals, gold plated leaves and crystal balls.

Tycoon Stanley Ho Opens Casino in Macau – washingtonpost.com

Later in the article, the reporter claims that the Venetian Macau will be the world’s largest hotel-casino. At 3000 rooms, it’d be squarely in the middle of the pack on the Strip, so this must be a reference to the number of gaming tables. I should probably keep a page on the UNLV website with the top ten casino resorts in the world by room count, gaming positions, square footage, gross revenue, and whatever other metrics they use. But, time being limited, I don’t…yet. If I were to keep a list, I’d have to make distinctions that the casino operators–or the PR people–might not like. For example, will Venetian/Palazzo be considered a single “integrated complex?” If so, it would be the world’s biggest by room count, but, by that logic, should Mirage/TI or, for that matter, Excalibur/Luxor/Mandalay Bay be considered “integrated complexes?” I don’t know, but I’d have to decide if I wanted to make the list authorative.

Also interesting that, even as Dr. Ho’s market share is slipping (“only” 63%), the pie is getting bigger, and since real estate is booming and he owns much of Macau, he’s got to be getting richer.

As far as the casino itself goes, it’s got about 3 times the tables of your typical Strip joint but one-fifth the slots, if you need a reference point.