But reflecting the awareness that the gaming business alone, as prosperous as it is, can no longer be counted on as the sole pillar for profit, market leaders are pressing to diversify business and lure new customers.
The issue will be discussed at the Global Gaming Expo Asia, referred to as G2E Asia, which kicked off Tuesday at the Venetian Macao.
Organized by the American Gaming Association and incorporating over 6,000 visitors, the yearly regional gathering defines itself as the single most influential event for the Asian gaming industry.
|The Non-Gaming Executive Exhibition Association, aiming to diversify Macau’s casino-focused industry, kicked off on Tuesday at the Global Gaming Expo Asia 2014 opening ceremony. From left: Michael Mecca, president and CEO of Galaxy Entertainment Group; Ted Chan, CEO of Melco Crown Entertainment; Geoff Freeman, president and CEO of the American Gaming Association; Pansy Ho, cochairperson and executive director of MGM China Holdings; and Allan Zeman, chairman and founder of Lan Kwai Fong Concepts. (G2E Asia)|
“Just as Hong Kong has positioned itself as a top global business hub, Macau is known as the world’s top-class gaming center, but is this enough?” said Pansy Ho, cochairperson and executive director of MGM China Holdings, in her keynote speech.
MGM China, a branch of MGM Resorts International, participated in the event as one of the top six game operators in Macau.
Gambling in Macau has been legal since the 1850s but it was the entry of large foreign casinos in the 2000s that helped business take off. In 2006, Macau outpaced the U.S.’ Las Vegas Strip in gaming revenues. Macau’s revenue in 2013 alone was $45 billion, which was over seven times that of Las Vegas, according to Reuters.
But behind the success, controversies remain ― namely the excessive market monopolization.
“Game operators may, of course, be disinclined to invest in nongaming sectors in short-term perspectives,” Ho said. “In the long term, however, all of us are stakeholders in diversification.”
To respond to changing consumer needs, the gaming sector needs to adopt a new strategy by shifting its focus from minority VIPs to the premium mass group.
“VIPs drive the headlines, but it is the premium mass that drives the actual profits,” said Tim Craighead, director of Asian Research and senior gaming analyst at Bloomberg Industries.
“The affluent middle-class family groups, referred to as the ‘premium mass’ in the Macanese market, have gained confidence in accessing Macau and its casinos,” said Grant Bowie, CEO of MGM China Holdings. “These new rising customers tend to seek non-gaming contents as well, triggering the needs for diversification.”
Grant Chum, senior vice president of global gaming strategy at Las Vegas Sands, suggested that the promotion of nongaming, family-friendly events is more likely to attract a wider range of consumers to Macau.
By Bae Hyun-jung, Korea Herald correspondent