Since we have been to Macau quite a few times (we love Hong Kong), and have travelled extensively in Asia, we are always interested to see what is going on in the casino world in South-East Asia. It´s almost an early indication of the transfer of wealth from Western economies to Eastern ones. And tycoons from Asia (the Hos), Australia (the Packers) and the US (the Adelsons et al.) continue to make huge bets on the region. Where will it all end? We take a look.
The sheer size of these investment bets are jaw dropping. The latest chips to be laid on the table are owned by a NYC hedge fund manager called Philip Falcone who runs Harbinger Capital Partners. They are pouring money into a huge hotel and casino near Saigon (now Ho Chi Minh City of course), in Vietnam. The war seems a long way away.
The Grand Ocean Double at the Ho Tram Strip.
The complex is known as the Ho Tram Strip, (good job it wasn´t The Ho Strip, otherwise there might have been some confusion with the Las Vegas version). It opened its gates 6 months ago and is targetting gamblers from (you guessed it) China, plus Vietnamese with foreign passports. Much like the Marina Bay Sands, local Vietnamese can´t play there (yet),
It´s about 1.5 hrs from Saigon by road (faster by chopper). Will it be a success? Some analysts are predicting that this is a step too far and it will flop. Sheldon Adelson would seem to agree, as he has backed out of any investments in Vietnam. With the domestic market effectively closed, it´s a big bet that the casinos will be able to lure punters away from Macau and Singapore. The competition is hotting up.
Asia continues to pile new gaming tables into the market. There´s Vietnam now, as we mentioned, but also the Philippines which has opened its first gaming resort, a $1bn investment called the Manila Bay Solaire Resort.
Manila Bay Solaire Resort
Melco Crown Entertainment, a Macau gaming company run by Lawrence Ho and James Packer, has inked an agreement with Philippine property developer Belle Corp to plough $600m into a casino resort that will open in March 2014.
And Melco reckons there will be 2 more in pretty quick succession.
And other territories? Are there any others vying to get in on the action? Well yes- Sri Lanka has also approved a $400m casino in Colombo, again driven by Ausiie tycoon James Packer’s Crown group.
But looking ahead, the elephant in the Asian Room would seem to be Japan. Politicians are working on a legal framework for casinos to operate in the country. Genting Casino is betting on Tokyo and Osaka. Again, it seems that there may be restrictions on local people playing. It´s all about attracting the Chinese. And this means intense competition: the junkets will be busy trying to mop up the high rollers and whisk them to the baccarat tables.
So will this all end in tears? For now, the growth in demand is still outstripping supply, as China´s middle classes inflate. The numbers are huge. Macau has already overtaken Las Vegas to become the world´s biggest gambling town. Don´t be surprised if Singapore, hits the number 2 spot. And who knows? In 10 years time, we could be saying “カジノ” rather than casinos.
