Has Macau ridden the storm?

There are now over 30 casinos in Macau. More are scheduled for the Cotai Strip on the island of Taipa, although the recession has slowed down their construction.

The largest venue in the enclave - and indeed in the entire world - is the Venetian Macao, which boasts a staggering 12,000 slot machines and 800 live gaming tables on 550,000sq.ft of casino space. It has now been open for two years.

Coming in a close second is City of Dreams, also on Taipa, the mega complex that launched its first phase in June this year. Phase one opened with 420,000sq.ft of gaming space.

The other large venues include Sands Macao, which opened its doors in 2004, MGM Grand Macau, Crown Macau, Wynn Macau, Casino Lisboa and StarWorld Galaxy Casino.

There are other mega resorts on the Cotai Strip that are still half built and behind schedule. Opinions vary as to why this is and whether or not the Strip will reach its full potential. Revenues are down and less people are arriving from the Chinese mainland, partly due to new visa restrictions.

However, the fact remains that Macau is one of the world’s greatest gambling centres and is set to be so for a very long time to come. There is more future competition in the shape of new jurisdictions in Singapore and Taiwan and the burgeoning Philippines, but Macau will remain the jewel in Asia’s casino crown.

One man who has made more trips to Macau than most in recent years is Christophe Leparoux of Gaming Partners International, a company that has grabbed an impressive market share there recently with its RFID chips and plaques.

Fresh back from his latest visit, Leparoux told InterGaming: "The combination of the economic downturn and the visa situation has directly impacted Macau over the last six to eight months. However, I have just returned from Macau and I got the feeling that the territory is already bouncing back, with operators looking forward to improved business conditions this summer."

He added that Macau is still very much a table games market and will remain so. "However, technology will take an ever-growing place to help operators streamline their operating costs and improve their monitoring of games. As such we see a bright future for RFID chips and equipment in the territory, besides the existing operating sites, with the expansion of the deployment of the technology."

On the other hand, he believes that security and the protection of the casino’s chip bank will always remain a "key issue" for operators. "In that respect, we will continue to work very closely with the industry to enhance the protection and sophistication of the chips."

GPI has been supplying casinos in Macau since 1973 and was the exclusive supplier to Dr Stanley Ho’s STDM casinos until the end of the monopoly in 2002. "The Macau market has always been of prime value to our company for its size and volume as well as for the sophistication of the products required," said Leparoux. "We can now boast a 90 per cent chips supply market share as we supply all the existing casinos.

"For over 35 years, European-style jetons and plaques have been the favourite wagers in use in Macau casinos. Due to the specification of the market, we had to offer an extremely wide range of shapes, designs, materials, colours and finishes to be able to distinguish between the many different VIP sets, with one or several specific sets being required for each VIP room.

"As security was always a prime concern, we had to design products to be highly counterfeit-resistant, either intrinsically such as plaques or jetons or by the addition of high security features to the chips such as holograms, special UV pigments, infra-red pigments, RFID, etc."

With the arrival of the large US operators following the end of the monopoly, the use of American-style chips expanded until it became the main chip bank of today’s Macau casinos and the use of plaques and jetons is now limited to high value denominations and VIP/junket sets.

Leparoux added: "At the same time, security could not be compromised as counterfeiting activities in the immediate Macau vicinity are high. Therefore, we had to offer a high level of integrity and security for our chips as well, which is best achieved with plaques and jetons." There has been no record of an effective counterfeit product during GPI’s 35-year-plus presence in Macau.

"The expansion of the number of operators and the succession of various casino openings within a short time frame required the adaptation of our production capacity at our facilities in France to accommodate all incoming orders of substantial volume within the requested lead time while providing the same level of reliability and service our company is renowned for."

Leparoux is confident about the future of casinos in Macau. "The territory will face competition from Singapore and later Taiwan or Japan," he said. "However, Macau will always remain what it is - a tiny gambling enclave within China that fascinates millions of avid Chinese gamblers."

Simon Herbert, international CEO ot Astro Corp of Taiwan, thinks Macau is riding the recession better than most. "It’s our view that the market has weathered the global turndown significantly better than many other markets," he told InterGaming.

Macau is a substantial market for Astro Corp, which has designed a series of GLI specification games based on Chinese legend specifically for the region. "What is good news for us is the fact that the importance of electronic games has increased within the total market," added Herbert.

Matjaz Petek of Slovenian multiplayer gaming machine manufacturer Alfastreet believes politicians hold the key to Macau’s future success or otherwise. He said: "Macau has been affected a lot by restrictions on travel on one hand and by the economic downturn on the other.

"I think it would be a pity not to take advantage of all the potential that this region has. But that is just my thinking - politicians usually think in a different way. The future of this gaming region lies in their hands. I hope they will be wise in applying the measures that will guarantee the prosperity of this region."

Alfastreet has been present in the Macau market for over six years now. "Even in these difficult times we believe in the future of this market," said Petek. "In terms of numbers, this market is not among the biggest for Alfastreet, but it is very demanding and a good reference for business elsewhere."

The company has developed some products specifically for the market, such as its multiplayer sic bo machine, which is a traditional Chinese game transformed in a modern multiplayer machine. "In this way we have included all the advantages of a state-of-the-art multiplayer in the traditional Chinese game in order to increase the security of play and increase operator revenue.

"We have finally seen an increase of the floor share for multiplayers and slot machines in the newest casinos, but the general numbers of slot machines are still low in comparison to other markets like the US and Europe. This is still the challenge for manufacturers in this market."