November 30, 2013 - 10:20 pm
Anyone trying decipher subliminal messages from the early November policy address by Macau’s top government official would have an easier time determining whether the Beatles were secretly telling us Paul was dead through the “Abbey Road” album cover.
Both ideas are urban myths.
Macau Chief Executive Fernando Chui wasn’t sending hidden signals when he delivered his 2014 annual speech to the special administrative region’s Legislative Assembly. Nor was Chui talking in secret code to Macau’s casino operators.
Let’s squelch a rumor that surfaces annually: The world’s most lucrative gambling market is not adding more gaming licenses. The current setup, three concessions and three subconcessions, is a policy that hasn’t changed in a decade.
Macau shows no signs of loosening the rule. That’s the reason behind Caesars Entertainment Corp.’s $483 million sale of a Macau golf course property last summer. Caesars had held onto the land since 2007, hoping that Macau would add more gaming operators.
The government has changed direction in the past on several matters concerning the casino industry, but not on this issue.
Visa restrictions, which limit the number of times mainland Chinese residents can travel to Macau, have come and gone. It’s been more than a year since any limits were placed on visits.
Two years ago, Macau officials said development opportunities on the Cotai Strip would be awarded to just two American casino operators. One company — either Wynn Resorts Ltd., Las Vegas Sands Corp., or MGM Resorts International — would be left on the sidelines.
Today, all three companies are building lavish, multibillion-dollar resort complexes on Cotai, all to open by 2016.
A few years ago, Macau’s government insisted casino operators add more nongaming amenities and attractions.
MGM Resorts’ partner, Pansy Ho, developed One Central Mall, next to the MGM Macau. Las Vegas Sands’ Venetian Macau opened in 2007 with 1 million square feet of meeting space and 1 million square feet of retail and dining.
Las Vegas Sands took the request for nongaming amenities to heart.
Within its Sands Cotai Central complex, the company operates three hotel brands — Conrad, Holiday Inn and Sheraton. Combined with The Venetian Macau and Four Seasons Macau, it has 10,000 guest rooms.
The Cotai region is transforming Macau into an overnight destination for middle-class Chinese. The market had been viewed as a place for day-trip gamblers whose revenue was secondary to the revenue produced by superwealthy high-end players staying in the casinos’ over-the-top suites.
Las Vegas Sands President of Global Operations Rob Goldstein said in October that the company’s hotel rooms are being filled by customers who don’t just gamble, but want to shop and dine, too.
“They stay longer, come from farther away and require sleeping rooms,” Goldstein said. “So (the) rooms in Cotai turned out to be a pretty good idea.”
Infrastructure improvements are expected to bring more visitors into Macau from the mainland. The $10 billion Hong Kong-Macau-Zhuhai Bridge is expected to open in 2016, replacing an hourlong ferry ride on the South China Sea with a 20-minute drive.
Las Vegas Sands has also brought special events into its 15,000-seat arena at The Venetian Macau, including last weekend’s championship fight between Manny Pacquiao and Brandon Rios.
In 2007, the Chinese national basketball team played an exhibition game at the arena. A year later, the U.S. National team, led by Kobe Bryant and LeBron James, held training sessions there and stayed at The Venetian Macau leading up the Beijing Summer Olympics.
This past week, Las Vegas Sands announced a partnership with soccer superstar David Beckham to create dining, retail and leisure concepts with the company’s Macau resorts and at the Marina Bay Sands in Singapore.
But Macau is still all about gambling, and that shows no signs of slowing.
In 2012, casinos collected a record $38 billion from gamblers. In the first 10 months of 2013, Macau collected $37.13 billion in gaming revenue with two months still to be counted.
Analysts said Chui’s speech had no bombshells, but he did raise concern over Macau employment. He wants operators to hire more Macau residents in the casinos, especially for managerial roles. A policy of restricting casino dealing jobs to Macau locals remains in effect.
An edict to hire Macau locals as casino managers could come when the $4 billion Wynn Paradise, the $2.6 billion MGM Cotai and the $2.7 billion Las Vegas Sands Parisian open.
Wells Fargo Securities gaming analyst Cameron McKnight, after reviewing Chui’s remarks, said the request could backfire on the government. Macau casinos could have trouble securing enough qualified dealers to staff more than 1,500 new table games.
“Assuming one supervisor and three dealers per table, this new table supply could require up to 6,000 new qualified dealers and employees” McKnight told investors. “As a result, we believe operators will increasingly look towards electronic table games or other productivity measures to help alleviate any labor constraints.”
Chui, appointed Macau’s second-ever chief executive in 2009, has a doctorate from Oklahoma State University but was born in a prominent Macau family and is a former culture minister. Being chief executive is much like being Macau’s governor, and provides a buffer between Macau and Beijing.
The highlight of Chui’s address: Each Macau resident will receive $1,127 to help with cost-of-living expenses. Macau has already brought in $11.89 billion in gaming taxes this year.
“His policy address was focused on enhancing the quality of life for Macau’s local workforce,” McKnight said.
Howard Stutz’s Inside Gaming column appears Sundays. He can be reached at firstname.lastname@example.org or 702-477-3871. Follow @howardstutz on Twitter.