Every superpower needs some entertainment. The Romans had their gladiators and chariot racing, the British hunted the fox and exported cricket, and the USA has baseball and the Super Bowl. Now it is China's turn.
After completing the monumental Shanghai F1 track - which was the venue of the inaugural Formula One Chinese Grand Prix on 26 September, 2004 - and the recent opening of the Hong Kong Disneyland Resort, China has begun to build on an already existing and highly popular form of entertainment among Chinese: gambling.
Macau has long been a haven for Asians eager to gamble away some money, as it is one of the few areas in the region where gambling on such a scale is legal. Today, and in the future, the main target audience is and will be mainland Chinese. Ever since Macau was handed back to the Chinese by the Portuguese in 1999, radical changes have been implemented. For one, gambling mogul Stanley Ho lost his government monopoly on the island's gaming industry in 2004. This saw his share of gambling revenue plummet from 100% to 55% and it is still falling. The new government also eased restrictions on mainland Chinese travelers to the island, allowing them to travel freely. Coupled with the incredible growth of the mainland and the increasing wealth per capita, this means an unimaginable number of potential visitors to the island and an exceedingly obscene income base.
In fact, Macau is already the biggest single gambling market in the world according to Morgan Stanley. In 2006, Macau casino's brought in an estimated $6.8 billion, versus an estimated $6.5 in Las Vegas. US gambling billionaire Sheldon Adelson of Las Vegas Sands even opened the world's largest casino in Macau in 2004; the Sands Macao. The Sands is equipped with 740 gaming tables and has recouped Adelson's $260 million initial investment in just eight months. Other gaming moguls investing heavily in the island are Steve Wynn of Wynn Resorts Ltd. and Kirk Kerkorian of MGM Mirage, to name but a few.
Important differences between Macao and Las Vegas is the fact that Macau earns over 70% of its revenue from casino taxes, while more than 50% of Las Vegas's tourism revenues come from non-gaming activities. In other words, Macau is highly dependent on gamblers spending their income in one of the countless casinos, whereas Las Vegas has something to offer non-gamblers as well. Indeed, in terms of tourism revenue, Las Vegas still easily outdoes its Asian counterpart. Furthermore, according to Bloomberg, the average length of stay in Macau is 1.17 nights, compared with 3.5 in Las Vegas. This dependency on gambling could spell trouble for the island, as other popular destinations such as Singapore have recently begun to issue licences to casinos as well. Nevertheless, the head start and strategic location (near 250 million Chinese, 128 million Japanese, 75 million Thai and 24 million Taiwanese potential visitors) of Macau should give it the edge over possible regional competitors.
It is interesting to note that both Disneyland and the gambling industry are located on the two islands that fall under the "one country, two systems" policy. This way China can continue 'preserve' her healthy Communist/Socialist "ideals," while simultaneously raking in big bucks and giving her citizens a much desired entertainment scene. Sure, both Disney and the Asian Las Vegas are little more than copies of US forms of entertainment, but China will be sure to try and beat the Americans at their own game. When it comes to sports, it seems highly likely that the Chinese will do just that at next years Beijing Olympic Games.
If entertainment and the size thereof is a pretty good indicator of status, then the US should be very weary of the recent unfolding of events in the Middle Kingdom.
After completing the monumental Shanghai F1 track - which was the venue of the inaugural Formula One Chinese Grand Prix on 26 September, 2004 - and the recent opening of the Hong Kong Disneyland Resort, China has begun to build on an already existing and highly popular form of entertainment among Chinese: gambling.
Macau has long been a haven for Asians eager to gamble away some money, as it is one of the few areas in the region where gambling on such a scale is legal. Today, and in the future, the main target audience is and will be mainland Chinese. Ever since Macau was handed back to the Chinese by the Portuguese in 1999, radical changes have been implemented. For one, gambling mogul Stanley Ho lost his government monopoly on the island's gaming industry in 2004. This saw his share of gambling revenue plummet from 100% to 55% and it is still falling. The new government also eased restrictions on mainland Chinese travelers to the island, allowing them to travel freely. Coupled with the incredible growth of the mainland and the increasing wealth per capita, this means an unimaginable number of potential visitors to the island and an exceedingly obscene income base.
In fact, Macau is already the biggest single gambling market in the world according to Morgan Stanley. In 2006, Macau casino's brought in an estimated $6.8 billion, versus an estimated $6.5 in Las Vegas. US gambling billionaire Sheldon Adelson of Las Vegas Sands even opened the world's largest casino in Macau in 2004; the Sands Macao. The Sands is equipped with 740 gaming tables and has recouped Adelson's $260 million initial investment in just eight months. Other gaming moguls investing heavily in the island are Steve Wynn of Wynn Resorts Ltd. and Kirk Kerkorian of MGM Mirage, to name but a few.
Important differences between Macao and Las Vegas is the fact that Macau earns over 70% of its revenue from casino taxes, while more than 50% of Las Vegas's tourism revenues come from non-gaming activities. In other words, Macau is highly dependent on gamblers spending their income in one of the countless casinos, whereas Las Vegas has something to offer non-gamblers as well. Indeed, in terms of tourism revenue, Las Vegas still easily outdoes its Asian counterpart. Furthermore, according to Bloomberg, the average length of stay in Macau is 1.17 nights, compared with 3.5 in Las Vegas. This dependency on gambling could spell trouble for the island, as other popular destinations such as Singapore have recently begun to issue licences to casinos as well. Nevertheless, the head start and strategic location (near 250 million Chinese, 128 million Japanese, 75 million Thai and 24 million Taiwanese potential visitors) of Macau should give it the edge over possible regional competitors.
It is interesting to note that both Disneyland and the gambling industry are located on the two islands that fall under the "one country, two systems" policy. This way China can continue 'preserve' her healthy Communist/Socialist "ideals," while simultaneously raking in big bucks and giving her citizens a much desired entertainment scene. Sure, both Disney and the Asian Las Vegas are little more than copies of US forms of entertainment, but China will be sure to try and beat the Americans at their own game. When it comes to sports, it seems highly likely that the Chinese will do just that at next years Beijing Olympic Games.
If entertainment and the size thereof is a pretty good indicator of status, then the US should be very weary of the recent unfolding of events in the Middle Kingdom.
No comments:
Post a Comment