Asia is clearly ready to play, if only the authorities and operators will let them do it legally and comfortably.
Macau is the undisputed global casino capital, but one staple of the Las Vegas Strip is absent, besides the sequined, feathered showgirl. Macau has no sports betting lounges in its casinos. That’s the result of a quirk in the law that the government seems in no hurry to fix. At the cutting edge of sports wagering thanks to another legal quirk, Daily Fantasy Sports betting is coming under siege in the US. But Macau and the rest of Asia could become the natural spot for DFS to continue its extraordinary growth run.
Macau’s glaring lack of modern sports betting lounges with wall to wall plasma, handheld wagering devices, VIP services – the “ultimate sports bar,” South China Morning Post sports columnist Tim Noonan calls it – owes to the limited nature of the city’s gaming liberalization. Sports betting remains a monopoly in Macau, as do lottery operations. Macau Slot, an affiliate of Stanley Ho’s SJM Holdings, holds the sports betting monopoly and takes bets on football (soccer for Americans) and basketball at 10 outlets around Macau, half in or near SJM casinos. These are as far from state of the art sports betting lounges in casinos as a bicycle is from Ferrari. Revenue reflects the lack of investment and innovation endemic to monopolies. Even with mobile, phone and online options for accounts holders present in the territory, Macau Slot booked a paltry 736 million patacas in revenue last year, the equivalent of US$92 million.
Across the Pearl River Delta, the Hong Kong Jockey Club, also a monopoly, booked HK$78.2 billion (US$10.1 billion) from its sporting betting on football only. Yes, Hong Kong is far bigger than Macau, but the revenue differential of 110 times isn’t just about the population difference but operator difference. Yet, as expiration of Macau Slot’s concession approached at the end of June, authorities made no moves toward liberalizing sports betting, even with the example of casino liberalization’s impact on investment and employment as well as revenue since the Sands Macao opened in 2005. Instead, the government extended Macau Slot’s monopoly, but only for one year, a sign that changes may be under consideration.
With Macau’s casino revenue way down and the VIP-centric business model floundering, sports betting seems like a natural way to breathe new life in gaming floors. “Sports betting lounges can enhance the appeal of a casino in a number of ways,” Global Market Advisors partner Andrew Klebanow says, including attracting different demographic groups that may not be drawn to traditional casino games and turning the global sports calendar into a promotions calendar.
Macau’s new Cotai resorts have room for hundreds more gaming tables than they’ll receive under the government’s table cap. Modern sport betting lounges could do more than just fill the space, but become differentiating factors among casinos.
The time may be ripe for US pioneers to shift their focus to Asia. It’s just a matter of tweaking the menu toward international and local football and other Asian favorites. Research notes that for eSports betting – conventional and fantasy betting on professionals playing combat games such as Defense of the Ancients and League of Legends – more than half the action comes from Asia, and half of that from mainland China. Asia is clearly ready to play, if only the authorities and operators will let them do it legally and comfortably.
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