EDITOR'S LETTER: World of potential
The last quarter of 2011 proved quite eventful for the United States gaming industry, what with casino legalization in Massachusetts, gaming expansion legislation introduced in Florida, the lifting of the sports wagering ban in New Jersey, the opening of Resort World New York, the first casino within the borders of New York City proper and, as a final holiday treat, the recent determination by the U.S. Justice Department that the 1961 Wire Act outlawing cross-border gambling over communications lines only applies to sports betting, likely clearing the way for states to foster and regulate online lottery and poker.
With all this going on right in our own backyard, it’s easy to overlook that gaming expanded across the globe in the latter half of 2011. Here are some recent events to keep an eye on in the coming months.
• Macau continues to astound-Remember back in January when a number of analysts claimed the mighty Macau market would likely experience oversaturation and slower growth in the second half of 2011? Well, it appears this pessimism was unwarranted, or at least premature. Macau-based casinos powered through 2011, totaling $33.5 billion in combined revenue according to government reports, up 42 percent from the $23.5 billion the enclave’s casinos generated in 2010. It appears that so long as China’s economy remains robust and travel restrictions remain light, Macau will continue to prosper. One cloud on the horizon: some economists predict an economic slowdown and tighter credit market for China going forward, something we in the U.S. are very familiar with.
• Infill gaming opportunities expand throughout Asia-Call it the Macau and Singapore ripple effect, but a growing number of Asian nations are warming to the idea of integrated resort development. At this moment, the leader of the pack appears to be Vietnam, which has set aside the Ho Tram Strip outside of Ho Chi Minh City for resort development, and attracted established U.S. casino developers such as Pinnacle Entertainment and MGM Grand. The Philippines has also made strides in the integrated resort realm, with Star Cruises, a subsidiary of gaming giant Genting Malaysia, recently announcing its intentions to build a second gaming resort at its Pasay City complex, already the nation’s largest casino.
Two larger nations also appear poised on the casino legalization precipice. Russia is in the process of finalizing its casino development plans for the Primorye Gaming Zone, near the eastern port of Vladivostok. Meanwhile, the earthquake and tsunami that shattered Japan in March has the nation seriously contemplating integrated gaming resorts as a way to fund the estimated $245 billion needed to rebuild from the natural disasters and revive its lagging tourism industry.
• Eyes on India-Although at first glance it does not appear to be much, the announcement by the Indian Ocean nation of Sri Lanka that it had overhauled existing gaming laws to attract more direct investment from international casino and hotel developers could be a harbinger of things to come for the region. Much like China a decade ago, India’s economy is emerging, and the newly wealthy are looking for ways to spend hard-earned money. Sri Lanka hopes to entice them with cutting-edge casino resorts. How long until adjacent nations decide to do the same?
For a number of reasons, it appears the stars are aligned for unprecedented global gaming growth in 2012 and beyond. The battered and bruised casino industry couldn’t ask for a better holiday present.