BETTING ON ASIA
Asia will be the world's fastest-growing casino market through 2010, according to estimates by consultants PricewaterhouseCoopers:
Market 2010 revenue* Avg. yearly growth 2006-2010
USA $74.5 6.9%
Asia Pacific $23.0 14.0%
Europe, Middle East, Africa $22.4 10.7%
Canada $5.0 8.3%
Latin America $0.2 12.1%
Worldwide $125.0 8.8%
* in billions;
Sources PricewaterhouseCoopers; Wilkofsky Gruen Associates
By Paul Wiseman, USA TODAY
HONG KONG — Inspired by Macau's emergence as the Las Vegas of the Far East, Asian countries from South Korea to Singapore are opening casinos or weighing whether to roll the dice on legalized gambling.
"Asia is without a doubt the most promising market for the expansion of the global casino gaming industry," says Jonathan Galaviz, a partner in Las Vegas-based casino consulting firm Globalysis.
Consulting firm PricewaterhouseCoopers predicts that revenue from casinos and other regulated gambling activities in Asia will grow 14% a year from 2005 to 2010 — the fastest pace in the world. "Asia is already a big gaming market," says David Green, director of the gaming practice at PricewaterhouseCoopers' Macau office. "It's just that most of it is illegal."
Now Asian gambling is going legit. And the trend goes beyond Macau, the autonomous Chinese region that last year overtook the Las Vegas Strip as the world's No. 1 gaming market:
•Strait-laced Singapore, where the government regulates everything from chewing gum to bedroom behavior, this month broke ground on the 121-acre, $3.1 billion Resorts World at Sentosa casino complex. It will open in 2010. Another casino, the $3.2 billion Marina Bay Sands, will open in 2009.
Singapore, which dropped its gambling ban in 2005, sees casinos as an important part of a broader effort to promote itself as a getaway for tourists. The city-state is aiming to increase the number of annual visitors from 9.7 million last year to 17 million by 2015, Globalysis says.
•South Korea last year opened three casinos, bringing its total to 17. "South Korea plans to continue expanding into the casino market in order to compete with Macau and lure upper-tier Japanese customers," says Tina Stehle, vice president of Agilysys, a Boca Raton, Fla.-based technology firm that works with casinos. South Korean newspaper Chosun Ilbo gushed earlier this year, "If 11 foreigners visit a casino, they will spend the equivalent of one exported car." Globalysis says South Korea's Jeju Island, which has eight casinos, could become "Asia's next casino gaming giant."
•Taiwan confirmed last month that it's considering allowing casinos — though PricewaterhouseCoopers last year predicted that gambling would be limited to a $600 million casino on Taiwan's Penghu Island and forbidden elsewhere.
•Japan's ruling party is considering legislation to legalize casino gambling. "The Japanese public is becoming more tolerant of gaming and realizes the benefits of (casino) legalization, such as (an) increasing tourism market," Agilysys' Stehle says. The move would imperil Japan's $250 billion-a-year pachinko business. Pachinko is a pinball game. It skirts Japan's gambling ban because players exchange prizes for cash outside pachinko parlors.
•PricewaterhouseCoopers expects gambling revenue in the Philippines to pass $1 billion in 2010 (up from $387 million in 2005) because the government is planning a big casino complex in Manila Bay.
Driving the regional interest in gaming: Asia's rise from poverty to affluence. An Asian Development Bank advisory group predicts 90% of Asians will live in "middle-income" countries by 2020. That shift has created millions of consumers with cash to spend on entertainment.
Ethnic Chinese, in particular, are enthusiastic gamblers. "Chinese have gambling genes in their blood," says Henry Tsai, assistant professor of tourism at Hong Kong Polytechnic University.
"China's consumers see places like Las Vegas on television," Galaviz of Globalysis says, "and they want to be able to have those same kind of tourism experiences in their own region."
So far, Macau is the only Chinese territory that allows gambling. But Ki-Joon Back, casino and hotel specialist at the University of Houston, says Chinese authorities have considered allowing casinos on Hainan Island in the South China Sea.
Tsai cautions that some Asian governments — particularly Taiwan's — may think twice before actually approving casino gambling. They're worried about the social cost of problem gamblers. "Westerners treat gambling as entertainment," he says. "For Chinese, they think gambling is a way to make money. It's a different mentality."
So far, South Korea forbids its citizens from betting in all but one of its 17 casinos. And Singapore is imposing a $60 entrance fee to weed out would-be bettors who can't afford to see their cash vanish at the slot machines or blackjack tables.
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