TABLE GAMES OR SLOTS? COMPETITION, EVOLUTION AND GAME PREFERENCE IN MACAO’S CASINO MARKET

Authors

  • Ricardo Chi Sen Siu Department of Finance and Business Economics Faculty of Business Administration University of Macau
  • William R. Eadington

DOI:

https://doi.org/10.5750/jgbe.v3i1.541

Keywords:

Macao, casino gaming, table games, slot machines

Abstract

The opening of Macao’s casino industry with new legislation passed by the government of the Macao Special Administrative Region (MSAR) in February 2002 has provided the opportunity for new foreign casino operators – Wynn Resorts (Macao) Limited, Las Vegas Sands, Galaxy Casino Company Limited (Hong Kong), MGM Mirage, Melco Crown, and potentially others – to launch casino operations in this territory. One of the strategic decisions that new participants in this market must make is the composition of table games and slot machine offerings, as well as the mix of gaming and non-gaming amenities, to be employed in their new casino properties. The evaluation of the characteristics of, and prospects for table games and slots in the emerging gaming market of Macao is also of considerable interest to the casino operations of SJM – a wholly-owned subsidiary of the previous casino monopoly STDM, and its sub-concessionaires.In comparison with casinos in North America and Europe, table games generate an exceptionally high proportion of casino gaming revenue in Macao. To conduct an objective study over this phenomenon, and to provide a reasonable forecast on future trends, this paper examines and discusses historical, social and economic factors that have driven the relative attraction for table games in Macao’s casinos. The paper also reviews the utilization of electronic gaming devices (slot machines) and their recent developments in Macao’s casinos. A comparison of the key determinants of the demand for table games and slots makes it clear that, at least in the near to intermediate future, the optimal strategy for Macao’s casino operators is to retain a high proportion of table games. This is in spite of the fact that the labor costs and floor space demands of table games are typically much higher than those of slots. Nonetheless, because of player preferences and betting patterns, the average net profit margin per square foot of allocated space from operating table games has so far remained considerably higher than that from slot machines.

References

‘A new partner of SJM, Mocha Slot Lounge’ September 29, 2003 Macao Daily News A10.

Administrative Regulation no° 13/72 ‘Regular Revision in gaming license’, 1972. Macao, PRC.

Almanac of Macau’s Economy 1984/1986. [in Chinese] (Macao, PRC: Jornal Via Kio, 1987).

Australian Casino Association Economic Report (September, 2008). Retrieved October 2, 2008, from

http://www. auscasinos.com/publications.cfm?PubSub_ID=48&session.validated=no

D Brady ‘Mayhem in Macau: The joint is jumpin’ at the Hotel Lisboa’ May 29, 1998 Wall Street Journal 1 ff.

‘Current development of Korea gaming industry’ March 23, 2003 Macao Daily News A11.

‘Definition of History of Macau’ Retrieved December 11 2004, from http://www.wordiq. com/definition/History_ of_Macau

Gaming Inspection and Coordination Bureau of MSAR Information-Statistics. Retrieved in various periods, from http://www.dicj.gov.mo/EN/index.htm

C K Lee ‘Sustainability and competitiveness in the Korean casino’. Manuscript presented at the International Conference on Casino Development and Strategy, Seoul, Korea, July 10-11, 2007.

P L Liu Aomen Bocaiye Zongheng (in Chinese) [An overview of Macao’s gaming industry]. (Hong Kong, PRC: Joint Publishing (H.K.) Co., Ltd., 2002)

Macao Daily News (various issues).

Macao Statistics and Census Service. Tourism Indicators (1998, December & 2007, December). Retrieved January 25, 2007 from http://www.dsec.gov.mo/index.asp?src=/english/html/e_tourism.html

Macau Handbook (in Chinese) (Macao, PRC: Macao Daily News, 2003).

‘Mocha aims to grasp 25% of Macao’s slot market’, September 30, 2003 Macao Daily News A3.

K J Mayer and L Johnson ‘A customer-based assessment of casino atmospherics’ UNLV Gaming Research & Review Journal (2003) 7(1) 21-31.

Nevada Gaming Control Board Nevada Gaming Revenue Report (December, 2007).

Portaria no°234/98/M ‘Regulations for Pachinko’, 1998. Macao, PRC.

‘SJM for your entertainment in Macao’ (2003) Macao’s Journey October (1).

R C S Siu ‘Evolution of Macao’s casino industry from monopoly to oligopoly: Social and economic reconsideration’ Journal of Economic Issues 2006 20(4) 967-990.

R Smith ‘Gambling outside Nevada: Gambling on Macao’ May 6, 2004 Las Vegas Review Journal.

W Y Wang and W R Eadington ‘The VIP-Room Contractual System and Macao’s Traditional Casino Industry’ China: An International Journal (2008) 6(2) 237-260.

Published

2013-01-02

Issue

Section

Articles