China’s high-spending gamblers are looking to bet outside Macau amid a government assault on corruption and extravagance, and that is boosting casinos from the Philippines to the Las Vegas Strip.
Visitors from China are lifting gambling growth in Las Vegas while casinos in Melbourne and Manila are fighting over Chinese VIPs with frills from private jets to suckling pigs.
This is while Macau, the one place in China where casinos are legal, has suffered three straight months of declining gambling revenue as the anti-graft crackdown shows no signs of abating.
MGM Resorts International, the largest owner of casinos on the Las Vegas Strip, and Wynn Resorts Ltd both posted recent results that beat analysts’ estimates.
That was enabled by strong growth in baccarat, a card game favored by Chinese gamblers, even as their Macau businesses suffer weaker growth.
“Since the scrutiny has intensified, gamblers are instead spending time away from Macau,” Hong Kong Morgan Stanley analyst Praveen Choudhary wrote in a report issued on Monday. “Rich and famous gamblers are lying low and junkets have turned cautious in extending credit to worthy people.”
Casinos’ revenue on the Las Vegas Strip has gained 3.7 percent to US$3.7 billion in the year to the end of July, driven mainly by a 14.4 percent jump in baccarat revenue, according to Robert Shore, a Las Vegas-based analyst at Union Gaming Group.
This indicates “an inverse correlation” with the weaker performance from high rollers in Macau, he said in an e-mail.
“Las Vegas is a brand that is clearly world-renowned and that people continuously want to come to,” MGM chief financial officer Dan D’Arrigo said via telephone when asked about Chinese gamblers.
Macau remains the world’s biggest gambling hub despite the recent declines, generating US$45.2 billion of casino revenue for the city last year, seven times more than the Las Vegas Strip and dwarfing the US$36.5 billion for the US as a whole.
Still, revenue from VIPs in the Chinese city could continue to contract for a further six to nine months, Choudhary said: “The impact on Macau gaming lagged the decline of other industries like lodging, food and beverage, events, and luxury retail.”
Chinese hotel growth was immediately affected by China’s anti-extravagance campaign that started in the last quarter of 2012, he said.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
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