From Business Week – In the gambling industry, everyone is watching Macau, the spit of land south of Hong Kong that is rapidly supplanting Las Vegas as the world’s gaming capital. But don’t count Vegas out just yet—some of the world’s high rollers in Macau appear to be curious about that famous Strip in the desert.
Wynn Resorts (WYNN), Las Vegas Sands (LVS), and MGM Resorts International (MGM) have been expanding rapidly in the Chinese enclave, lured by the enormous opportunities of a large and growing middle class, plus wealthy gamblers. As the Macau business grows, American gambling companies have been using their Las Vegas operations as a chance to entice their Asian clientele to a different upscale experience—one where the tax hit is far softer than Macau’s 39 percent.
“The larger the base of people you attract in Macau, the greater the opportunity you have to sell them on other properties,” says Christopher Jones, a gaming analyst with Telsey Advisory Group. The rise of Asian travelers in Vegas has also been seen in the changing mix of gaming revenue: Table games, like baccarat, which are preferred by Asians (and James Bond) are growing far more robustly than slot machines, which are loved by Americans. In Macau, baccarat accounts for roughly two-thirds of the gaming industry’s $38 billion in revenue.
Wynn’s founder and chief executive, Steve Wynn, discussed the trend today, unbidden, on a conference call with analysts. “Our brand, because of the market segment we cater to, tends to benefit from the international market. In these emerging markets a lot of people are enjoying success outside of the United States, and they make their way to Las Vegas. We’re one of the first choices for that kind of visitation,” he said. “And we cater to that business aggressively.”
