Casino capitals hedge bets with hospitality, entertainment

NEW YORK/HONG KONG/SINGAPORE -- Key locales in the global casino market are doubling down in related fields such as entertainment -- a strategy that is working better in the gambling mecca of the U.S. than in Asia's struggling casino capital.

Global casino revenue hit $156.7 billion in 2014, the latest year for which hard data is available, according to Global Betting and Gambling Consultants of the U.K. This is 40% more than just five years before. Estimates put the 2015 figure at $141.7 billion, a decline due in large part to China's economic deceleration and a fierce anti-corruption campaign targeting the wealthy there. But that dip is temporary, according to Eugene Tan Kheng-boon, a law professor at Singapore Management University. The sector has ample room to grow by bringing in peripheral business such as exhibitions and concerts, he said.

Winning streak

The U.S. is helping lead such growth. Spending at American casinos grew more than 2% to a record $38.5 billion in 2015. The market has expanded 20% over the past decade.

Massive casino resorts, clustered in Las Vegas, Nevada, remain a major destination for both American and foreign travelers. Visitor numbers have bounced back from a decline after the 2008 financial crisis, and casino revenue is on the rise. Non-casino operations are even more robust.

Las Vegas was the first town Bob Dylan played after his Nobel Prize win was announced this year. Cirque de Soleil, a well-known acrobatics troupe, is in permanent residence there. Trade shows and conferences, meanwhile, bring guests into town for days at a time -- increasingly to hotels that do not even have casinos on-site. Revenue from these businesses now exceeds that from the city's casinos.

Smaller facilities, meanwhile, are on the rise across the U.S., as cash-strapped municipalities turn to gambling to pad out tax revenue. Casinos are now legal in 24 states, up from 14 in 2000.

New players

The lights shine less brightly in Macau, Asia's longstanding casino hub. Gross gambling revenue there from January to November slipped 4% on the year to 203.4 billion pataca ($25.4 billion), according to the region's government. This is just 60% or so of the 2013 peak.

China's wide-ranging anti-graft drive has led that country's wealthy -- key Macau patrons -- to move their gambling activity to locales less exposed to Chinese oversight, such as Singapore and emerging nations.

Glitzy approach works for Vegas, but Macau still suffering

Casino operators are now trying to duplicate the Las Vegas model, creating large resorts with attractions for the whole family. Sands China, a U.S.-affiliated developer, in September opened The Parisian Macao, marked by a half-sized Eiffel Tower. But this has met only limited success./

Beijing, meanwhile, is cracking down on the gambling sector, in October detaining several employees of Australia's Crown Resorts, a major casino operator that courts Chinese high-rollers.

Source from: http://asia.nikkei.com/Business/Trends/Casino-capitals-hedge-bets-with-hospitality-entertainment

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