Casinos Macau: Background and Future (And What About Monaco and Vegas?)

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1 Casinos Macau: Background and Future (And What About Monaco and Vegas?) william n thompson professor emeritus of public administration university of nevada, las vegas european association of gambling studies loutraki, greece september 20,2012

2 The Speaker in Las Vegas--The Macau (?) of the West

3 European Casino Model The First Capital of Casino Gaming: Monaco

4 Monaco-Monte Carlo Casino

5 Europe and Monte Carlo Development New nationalism renders casinos as adversaries Casinos close or limited: Germany, France Monaco welcomes casinos for tourism Amenities combine with Monopoly Status Casinos seek elite players not mass markets As Europe Opens it maintains high status and local markets

6 European Casinos 1. Monopoly Locations 2. Excessive Taxation/some gov t ownership 3. Limited Access: Id s required, dress codes, fees, no credit, limited alcohol, few comp s, no advertising 4. Limited hours 5. Local markets 6. Career employment, tips pooled-big part of salary 7. Table gaming dominates 8. Quiet Décor, Ambience, windows, blue motif

7 Las Vegas Emerges As Monaco s Successor 1950s-2000

8 Las Vegas Attributes 1. Demographics 2. History 3. Visitors 4. Gaming The Win Win Phenomenon 5. Hotels 6. Restaurants 7. Entertainment 8. Shopping

9 Factors in Las Vegas Success 1. Transportation: Jets (Fast, High, Big); Airport Location; Location of I Air Conditioning 3. Hoover Dam: Power and Water 4. Convention Center Location 5. Synergy: Kefauver factor 6. An OPEN City Y All Come Investors, Operators 7. LOW Taxes 8. From a model to a model on amenities

10 A-Ma Macau Macau was the FIRST European colony settlement in Asia. The Portuguese came in 1557 to Stay for 442 years. They came to trade, and to establish an outpost for The Society of Jesus and others to spread Christianity throughout Asia. And to sort of oversee a bit of sin!

11 Development of Macau 1. The Portuguese Come,Trade, Play and Pray Opium Wars, Coolie Trade, Sins (several) and Religion s A rival port in Hong Kong stifles trade, but bans gaming 4. Gambling emerges as a primary activity regulation The first monopoly Tai Xing (Fu Tak Yam) The STDM (Stanley Ho) monopoly China regains sovereignty Licensing opens up three then six licensees 9. Macau gaming (imitates) overtakes Las Vegas

12 Lots of $--Gaming Revenues in Macau and in Nevada Year Macau Nevada 2002 (11) $2.8 billion $9.5 billion 2003 (11) $3.6 billion $9.6 billion 2004 (15) $5.2 billion $10.6 billion 2005 (17) $5.6 billion $11.6 billion 2006 (24) $7.1 billion $12.6 billion 2007 (28) $10.4 billion $12.8 billion 2008 (31) $13.6 billion $11.6 billion 2009 (33) $14.9 billion $10.4 billion 2010 (33) $23.5 billion $10.5 billion 2011 (34) $33.5 billion (STRIP $8 billion)

13 Isn t it Time to Put Macau on the Map

14 Just Across from Hong Kong and Disneyland

15 Macau, Taipa, Coloane as One

16 Casinos Spread Out/No Walking

17 Portion of Las Vegas Strip Revenue from Gambling--Macau Consistent 90%+ (Data from the Nevada Gaming Abstract) % % % % % % % % % % % % % % % % % % % % % %

18 Macau Should Be MORE than Just a Cash Cow

19 Ruins of St. Paul World Heritage Site

20 Guia Hill Lighthouse is First in Asia

21 Modern Times--Upward Bound

22 Portugal and China: Happiness

23 Taipa and Room for Expansion

24 Looking Over to Cotai Strip

25 Taipa and Cotai Strip

26 Central Macau

27 Wynn at the Center

28 Charismatic Macau s Leaders

29 Sheldon Adelson--Venetian

30 Steve Wynn Of the Wynn, of Course

31 Kirk Kerkorian M.G.M.

32 Hong Kong s Lui Che Woo-- Galaxy

33 Asia s Stanley Ho (SJM) Holds the Gold (or is mooncake)

34 Lawrence Ho (Mocha and Melco)

35 Australia s James Packer--Melco

36 Pansy Ho Partner with M.G.M.

37 Ho s SJM (formerly STDM) Casinos We are Chinese. We should unite against foreign capital. We cannot keep silent. If not the foreign capital will bury us S. Ho 2005 You never know the effect his words can have, response by S. Adelson 2004 Ho had 11 casinos 2011 Ho has 20 casinos Macau Revenues: 2004 $5.2 billion $23.5 billion Before 2004 Ho s $=$3.4 billion 2010 Ho s $=$6.4 billion And Look what happened to Lisboa when it got buried.

38 Ho took over 1962 Lisboa 1970 Grand Lisboa 2007 Monopoly down) Competition (up)

39 Is this Good Feng Shui?

40 Ho in HIS Colony Portugal

41 Ho s Ponte 16

42 Grand Emperor by Ho

43 Ho s Mandarin Oriental

44 Ho s newest Arc de Triumph

45 Casa Real A Ho Casino

46 Sheldon Adelson s Casino Clones Adelson also told Ho: (In response to his remarks) If you do not have the ability to compete, the don t complain. If you cannot compete, you will have to face elimination. Both are doing fine, doing just fine.

47 Venetian--Largest Casino in the World that s NOT Vegas

48 Venetian Vegas Experience

49 Venetian s Sands

50 Racetrack View Galaxy, Venetian

51 Woo s Galaxy World

52 Galaxy World and Grand Waldo

53 Galaxy s Starworld

54 Galaxy s President Casino

55 Lawrence Ho & James Packer s Melco--Crown of Cotai Strip

56 Crown of Melbourne

57 Melco s Altria

58 City of Dreams and Hardrock on Cotai Strip

59 The First Wynn-Macau

60 Then the Encore

61 MGM and Ho s Arc de Triumph

62 M.G.M. (Pansy Ho and Kirk Kerkorian)

63 Inside the MGM

64 Summing it Up--Bigtime

65 Basic lesson:why Las Vegas Ruled: Lisboa--Monopoly andcompetition

66 Customers? 1.4 Billion in China One Billion two hours away by Jet Sixty Million just one day by car China allows individual visas 2 times each 3 months Hong Kong 50 minutes by Hydrofoil owned by Ho Some things Las Vegas cannot beat

67 Are there Obstacles in the path? A. Reluctant political support Visa questions B. Gambler Fatigue C. The Unforeseen Calamity:Weather, Quakes,Wars,Epidemics D. Competition (Singapore, Malaysia, Korea now, Japan, India Viet Nam soon?)

68 The Las Vegas Brand: Is this a Macau Model? A. Forces in Las Vegas History: dam, military bases, crack-down on illegal gaming, airport, airconditioning, highway, B. An Open City C. NOT a government project. D. Amenities Triumph shows, restaurants, shopping, hotel rooms Change for Macau---BUILD TOURISM A. Live the History B. Walk the City C. Circle it with buses D. Access the region open visas E. Sands on the Beach F. More amenities Rooms, shows, meals G. Ecotourism (Liqufaction problem) H. Medical tourism I. Language outreach.

69 This Would REALLY Help: ME

70 Now Was this a Las Vegas Experience?

71 It s Been My Pleasure

Macau Operations. Edward Tracy President and CEO Sands China Ltd.

Macau Operations. Edward Tracy President and CEO Sands China Ltd. Macau Operations Edward Tracy President and CEO Sands China Ltd. A Promising Development Opportunity? The Area Between Coloane and Taipa Circa 2002 2 The Original Plan for the Cotai Strip 3 Supply Driven