Japan’s Gaming Prospects Heat Up

For years now, many have eagerly speculated that Japan will pass legislation allowing casinos to be opened within the nation. This year, more than in previous years, it looks like Japan may pass such legislation. With things heating up in the Asian gaming market, e.g., in South Korea and The Philippines, and with the 2020 Summer Olympics in Tokyo creeping up, there seems to be more than a hint of urgency to green-light casino development in Japan.

Despite having several forms of legal gaming, such as pachinko, lottery, and race betting, Vegas-style games are not currently permitted in Japan. The opposition to casinos in Japan has cited problem gambling and opportunities for increased organized crime activity as concerns. However, promises of multi-billion dollar foreign investments and the allure of a mechanism for economic recovery may outweigh those concerns this time around. Prime Minister Shinzo Abe has voiced his support for legalizing casinos as a potential means by which to revive the economy, forming part of his “Abenomics” strategy.

This summer, unless snagged by procedural issues, Parliament is expected to pass legislation  for four casino resort licenses. Diet member Takeshi Iwaya of the Liberal Democratic Party leads the push for resort gaming in Japan and has multi-party support. At least one casino is expected for Tokyo, and another in Osaka. We believe that Japan could become one of the most lucrative gaming markets in the world (behind Macau). With the passage of this legislation, Japan will likely become the stage for one of the fiercest battles for casino licenses the world has ever witnessed.


Contributed by:

Anthony Mumphrey, III, Principal
anthony@tmg-consulting.net or 504.569.9239 x 22

and

Nicholas Farrae
Senior Analyst, Economics & Gaming
nicholasfarrae@tmg-consulting.net or 504.569.9239 x 31

—–

 Disclaimer
The views, interpretations, or strategies expressed are those of the authors, and do not necessarily reflect the position of TMG Consulting. This site is meant for educational purposes only and does not constitute professional advice. TMG Consulting makes no representation as to accuracy, completeness, or suitability of any information on this site and will not be liable for damages arising from its display or use.

iGaming Goes Live in Three States

Since our last entry on iGaming, Nevada, New Jersey, and Delaware have become the first states with (legal) live online gaming websites within their boundaries.

In 2011, the U.S. Justice Department reversed its ruling on internet gambling. Today, legal internet gaming is gradually rolling out across the U.S. How much revenue iGaming will generate and exactly how smoothly iGaming websites will operate remains unseen.[1]

Nevada

Nevada became the first state in the U.S. to operate legal iGaming.[2] Currently, only online poker is allowed in Nevada, and the Nevada Gaming Commission has no plans to expand beyond this in the foreseeable future.[3] Two websites, UltimatePoker.com and W888.com hold licenses in the state with the express purpose for online gaming, launching their websites in April 2013 and September 2013 respectively.[4] The websites are only allowed to be accessed by players physically within the state of Nevada. Participants are subjected to an extensive identity verification screening that ensures that that they are of gambling age.

But how much is Nevada making off of this new source of revenue? Nevada’s gaming commission has indicated it will only report iGaming revenues in a separate category of monthly reporting once there are three online poker sites operating in the state.[5] With just two websites up and running, there are no official reports of online poker revenue to date.[6]

Chapter 463 of Nevada Revised Statue[7], not only authorizes iGaming within the state, but positions Nevada for interstate gaming, allowing Nevada to negotiate online gaming agreements with other states.[8]

Delaware

Delaware passed legislation on June 27th, 2012 authorizing online gaming within the state. In October 2013, Delaware rolled out the first “real money stakes” internet gambling games to selected users, and in November 2013, online gambling was made widely available to Delaware residents[9]. Users physically in Delaware are able to play not only online poker, but also blackjack, roulette, and slot games.[10] While online gaming is not expected to generate much improvements in tax revenue, the expectation is that younger gamers will be drawn to Delaware’s brick-and-mortar casinos.[11] After launching online gaming, gamers in Delaware who tried to play poker experienced connectivity issues due to location-based software issues.[12]

New Jersey

New Jersey became the third state to offer iGaming on November 26, 2013, after the New Jersey Division of Gaming Enforcement green-lighted six casinos licensed to operate statewide internet gaming. The six casinos approved are the Borgata Hotel Casino & Spa, the Tropicana Casino and Resort, Trump Plaza Hotel and Casino, the Trump Taj Mahal Casino Resort, Bally’s Atlantic City, and Caesars Atlantic City.[13] Registered gamers who are physically within the state of New Jersey can play blackjack, slots, and poker online.[14]

As of early December 2013, Atlantic City’s casinos are struggling with their verification systems. The general manager at the Tropicana Atlantic City, Steve Callender, said “about 75 percent of people who have tried to play on the resort’s online gaming website — TropicanaCasino.com — have been denied because the system could not verify they were in New Jersey.” This is due primarily to three reasons: technical problems, users not physically present in New Jersey trying to access these sites, and some major banks, PayPal, and American Express having policy to not process online gaming transactions.[15] According to Moody’s, iGaming in New Jersey stands to generate $250 million to $500 million within its first year.[16] Being an early mover in iGaming, New Jersey hopes to gain an edge over casinos in nearby states, such as Pennsylvania, that have caused Atlantic City’s land-based operations to struggle in recent years.

What’s Next?

According to the National Conference of State Legislatures, six states are working to authorize iGaming within their borders. California, Illinois, and Pennsylvania each have iGaming resolutions pending within the state legislative bodies. Colorado, Hawaii, Iowa, and Mississippi had iGaming laws which failed to pass in 2013.[17] With three states already conducting iGaming operations, it’s only a matter of time before the first interstate online poker games make their debut.

Contributed by:

Nicholas Farrae

Senior Analyst, Economics & Gaming

nicholasfarrae@tmg-consulting.net or 504.569.9239 x 31

 

—–

 Disclaimer
The views, interpretations, or strategies expressed are those of the authors, and do not necessarily reflect the position of TMG Consulting. This site is meant for educational purposes only and does not constitute professional advice. TMG Consulting makes no representation as to accuracy, completeness, or suitability of any information on this site and will not be liable for damages arising from its display or use.

[1] “So What is New Jersey’s Online Gambling Market Really Worth?” OP Report. Web. Online Poker Report. 23 April 2013.

[2] “Know When to Fold.” The Economist. Web. The Economist Newspaper Limited. 14 Sep. 2013.

[3] “Nevada Examines iGaming Changes.” Casino Connection AC. Web. Casino Connection Atlantic City. 31 Oct. 2013.

[4] “Nevada Poker Sites.” US Poker.com. Web. USPoker.com 2013

[5] “Poker Revenues Rise in June.” Las Vegas Review-Journal. Web. Stephens Media LLC. 2 Aug. 2013.

[6] “Nevada and New Jersey Jockey for Online Gambling Revenue.” The Pew Charitable Trusts. Web. The Pew Charitable Trusts. 11 Feb. 2013.

[7] “Chapter 463—Licensing and Control of Gaming.” State of Nevada. Web. State of Nevada. 2013.

[8] “In Nevada, Online Gambling Poised to go Interstate.” Marketplace Business. Web. American Public Media. 22 Feb. 2013.

[9] “Caesars, Partner 888 to Launch Online Poker in Nevada.” Reuters. Thomsonreuters.com. 17 Sep. 2013

[10] “Delaware Ups Ante with Online Gambling.” Delaware Online. Web. Gannett. 31 Oct. 2013.

[11] “Online Gambling to be Allowed in Delaware.” NPR. Web. NPR. 4 Nov. 2013.

[12] “Delaware Internet Gambling Facing IP Issues, Lack of Poker Traffic.” Pocket Fives. Web. PocketFives.com. 10 Nov. 2013.

[13] “Atlantic City, NJ – NJ OKs Statewide Internet Gambling For 6 Casinos.” Vos Iz Neias. Web. VINNews.com. 25 Nov. 2013.

[14] “Christie Signs Bill Legalizing Online Gambling.” Philly.com. Web. Philly.com. 2 Feb. 2013.

[15] “Online Gambling Issues persist into Second Week of Web Betting on N.J.” New Jersery On-Line LLC. Web. Advance Digital. 5 Dec. 2013.

[16] “Online Gambling is Good for New Jersey’s Credit Rating.” The Washington Post. Web. The Washington Post. 2 Dec. 2013.

[17] “2012 Legislation Regarding Internet Gambling or Lotteries.” National Conference of State Legislatures. Web. National Conference of State Legislatures. 7 Feb. 2013

Status of Internet Gaming in the United States

Since our last entry on Internet gaming (https://tmgconsulting.wordpress.com/2012/03/13/igaming-more-joint-ventures-strategic-alliances-and-mergers-acquisitions-than-you-can-shake-a-stick-at/), much has changed.  National-level legislation did not move as quickly as some had hoped, while individual states are considering legalization of online gaming on their own.  In service to our clients, TMG continually monitors the progress of Internet gaming in the United States.  This blog entry is a brief summary of some of the more relevant developments of late.

In 2009, New York and Illinois’ lotteries petitioned the Department of Justice (DOJ) for a legal opinion on their plans to sell lottery tickets online. In response, the Department of Justice (DOJ) issued a Memorandum Opinion[1] on December 23, 2011 which stated that Internet gaming transactions are legal between states were gambling is legal, effectively reversing its previous interpretation under the Federal Wire Act that implied it was illegal. The ramifications of the DOJ’s opinion are still developing throughout the country, with several states passing or attempting to pass new legislation to allow iGaming within their borders and reap the economic benefits.

As of June 2013, there were five states with some form of legalized iGaming and at least 18 other states that were exploring their options or working to pass enabling legislation. Only two states, Utah and Texas, have specifically prohibited iGaming, while the remainder of states in the U.S. have yet to publically take a stance.[2]  The types of games that are offered (or will be offered) in states with enabling legislation vary from online lottery tickets, online poker, online Vegas-style table games (e.g., blackjack), and online slots games.

Factions within the U.S. Congress have also introduced legislation on the federal level this year. Senate Majority Leader Harry Reid submitted a bill that would set federal standards for online poker throughout the nation, while banning casino-style online games (e.g., blackjack, slot-style games, etc.). In a separate effort, Rep. Peter King introduced a bill that would also seek to set federal standards for online gaming, but would not ban casino-style online games. At least one other bill related to online poker is also expected to be introduced this summer.  Without more uniform agreement on whether or not casino-style games should be allowed online, it seems unlikely Congress will pass an online gaming bill in 2013.

States that have Taken Action

  • Delaware: Legislation has been passed allowing poker, slots, and table games to be played online within the state’s borders. The Delaware Lottery will oversee a centralized iGaming system which will be operated by the current land-based racetrack casino operators in the state. Delaware expects it will bring its iGaming online by September 30, 2013.[3]
  • Georgia: New legislation now allows an online lottery in the state. The Georgia Lottery controls this operation and offers lottery ticket sales on its website.[4]
  • Illinois: New legislation now allows an online lottery in the state. The Illinois Lottery controls this operation, which has already commenced.[5] Online poker was proposed in a recent gaming expansion bill that was vetoed by Governor Quinn.[6],[7]
  • Nevada: In February 2013, Nevada passed iGaming Legislation which allows online poker to be operated by companies that are already licensed to operate land-based casinos in the state. Existing operators must successfully apply for an iGaming permit with the Nevada Gaming Control Board. The first company in the US (Ultimate Poker) was awarded an online gaming license in April 2013 and is now active.[8] Additionally, in February 2013, Nevada’s Governor signed a bill authorizing the state to enter into interstate compacts allowing online poker.[9]
  • New Jersey: New legislation now allows online versions of all games currently offered at land-based casinos. The law has yet to be executed and awaits activation from the New Jersey Division of Gaming Enforcement. Industry executives estimate online gaming may not be live in NJ until after mid-2013, possibly not until 2014.[10]

States Considering Online Gaming

  • California: Interested parties are pushing for online poker to be operated by the existing land-based casinos.[11]  Two bills are currently (June 2013) under consideration in the Senate.[12]
  • Connecticut: Facing pressure from Foxwoods casino to authorize Internet gaming. As of June 2013, it is unclear what route Connecticut will ultimately take with iGaming.[13]
  • Florida: As of June 2013 there are two bills, one in the House and one in the Senate, proposing online lottery ticket sales.[14]
  • Hawaii: Legislation was proposed in 2013 session, but failed to pass through the Legislature.[15]
  • Iowa: Proposed legislation for online gaming was rejected by the Iowa House of Representatives in 2013, for the second year in a row.[16]
  • Kentucky: The Kentucky Lottery Corporation approved the sale of online lottery tickets, which is expected to boost annual lottery proceeds to the state by $80 million per year. Online ticket sales are expected to begin in 2015.[17]
  • Louisiana: A resolution was passed by the State Legislation in June 2013 that authorizes a study for the impact of Internet gaming in Louisiana and to report its findings by March 2014.[18]
  • Maryland: Various bills were proposed in 2013.
  • Massachusetts: Various online gaming bills have been proposed.[19]
  • Michigan: Two forms of legislation prohibiting online lottery ticket sales in the state were proposed in April 2013.[20]
  • Mississippi: For the second year in a row, Mississippi failed to pass its intrastate online gambling bill.[21]
  • New York: The New York Senate has declared it supports authorizing online poker. A bill has yet to be introduced.[22]
  • Ohio:  Legislators are exploring the issue which may require a state constitutional amendment to allow online games.[23]
  • Oklahoma:  A bill was proposed in the State Senate to make playing of lottery games on VLTs and on the Internet illegal without first purchasing a paper lottery ticket at a lottery retail location.[24]
  • Pennsylvania: Legislators have indicated that there is pressure to enable online gaming in the state in order to keep up with Nevada and its neighbor New Jersey.[25]
  • Texas:  Multiple constitutional amendments were proposed in 2013 seeking to allow online poker.
  • Washington: Online poker bill failed in early 2013. Another attempt next year seems likely.[26]
  • Washington D.C.: A forerunner in last year’s race to enable iGaming, Washington D.C. came up short. Current legislative plans regarding online gaming are unknown.[27]

Revenue Potential

Of course, the question on everyone’s minds: how much $$$?  Some recent forecasts are shown below:

  • “The American Gaming Association says that roughly 85 countries have legalized online gambling and there is around $35 billion bet online each year. The Association believes that the US market will be worth $10 billion each year by 2017 and has the potential to grow far larger than that.”[24]
  • “…should online gaming be legalized, the U.S. market for online casinos and poker could be worth as much as US$12 billion, according to Goldman Sachs.”[25]
  • “…revenue from the United States earned from online gambling in 2012 was estimated at $17 to $19 billion.”[26]

Contributed by:

Nicholas Farrae

Senior Analyst, Economics & Gaming

nicholasfarrae@tmg-consulting.net or 504.569.9239 x 31

—–
 
Disclaimer
The views, interpretations, or strategies expressed are those of the authors, and do not necessarily reflect the position of TMG Consulting. This site is meant for educational purposes only and does not constitute professional advice. TMG Consulting makes no representation as to accuracy, completeness, or suitability of any information on this site and will not be liable for damages arising from its display or use.

[1] Department of Justice. “Whether proposals by Illinois and New York to use the Internet and out-of-state transaction processors to sell lottery tickets to in-state adults violate the Wire Act, Opinions of the Office of Legal Counsel in Volume 35.” December 2011.

[2] iGaming Business North America. “State of the Union.” iGaming Business North America. Issue 05, February/March 2013.

[3] Stradbrooke, Steven. “PokerStars among bidders for Delaware Lottery contracts.” CalvinAyre.com March 2013.

<http://calvinayre.com/2013/03/20/business/pokerstars-among-delaware-lottery-bidders-optimal-payments-plots-us-return/&gt;

[5] iGaming Business North America. “State of the Union.” iGaming Business North America. Issue 05, February/March 2013.

[6] Vinicky, Amanda. “Quinn: Online Gambling Proposal ‘Problematic.’” NPR via WUISNews.org  March 2013.

<http://wuisnews.wordpress.com/2013/03/26/quinn-online-gambling-proposal-problematic/&gt;

[9] Collson, Brett. “Nevada Gov. Brian Sandoval Signs Interstate Online Poker Bill.”  Poker News Global. February 2013. <http://www.pokernews.com/news/2013/02/interstate-online-poker-bill-moves-forward-in-nevada-14377.htm&gt;

[10] The Associated Press. “Opposition to Internet Gambling Lessening in N.J.” DailyFinance.com March 2013. < http://www.dailyfinance.com/2013/03/20/Internet-gambling-opposition-lessening-nj-christie/&gt;

[11] iGaming Business North America. “State of the Union.” iGaming Business North America. Issue 05, February/March 2013.

[13] iGaming Business North America. “State of the Union.” iGaming Business North America. Issue 05, February/March 2013.

[25] iGaming Business North America. “State of the Union.” iGaming Business North America. Issue 05, February/March 2013.

[27] iGaming Business North America. “State of the Union.” iGaming Business North America. Issue 05, February/March 2013.

Economic Development: Invest in Transit

Source: www.ridemetro.org

Houston’s Light Rail, http://www.ridemetro.org

We at TMG have been working for months to statistically, economically or even anecdotally correlate good public transit to economic prosperity in a city.  Observationally, cities that support strong economies like New York, San Francisco, Seattle, Chicago, and Boston have a transit system with good coverage and high frequency.  It is unknown whether good transit attracts economic development, or if economic development demands good transit.  We are still working to develop a successful index to correlate these two factors. Here is what we do know: (more…)

iGaming: More Joint Ventures, Strategic Alliances, and Mergers & Acquisitions Than You Can Shake a Stick At

We last blogged about the explosive developments that have followed the DOJ’s Wire Act Opinion.  States throughout the U.S. have been scrambling to install iGaming legislation and programs.  Just as the states have been doing, but far in advance to the DOJ’s Opinion, a broad range of companies in the gaming industry have been scrambling to be in the best possible shape for the hopeful explosion of iGaming opportunities in the near future.

It’s not just companies involved with existing iGaming markets in other parts of the world, but also major brick-and-mortar suppliers such as IGT and even brick-and-mortar operators such as Caesars Entertainment, preparing for iGaming in the United States.  iGaming is new and exciting here, and even companies rooted in the social media industry, such as Zynga, have taken steps to take full advantage of legal online poker in the U.S.  Briefly we’ll review some of the recent and notable corporate alliances, mergers & acquisitions, and joint ventures in the iGaming industry. (more…)

Upcoming Conferences

TMG Staff are active in their respective fields, regularly participating in industry conferences and continuing education programs.  Over the next few months, TMG staff will be coordinating, sponsoring, presenting at, or attending:

  • Louisiana Chapter of the American Planning Association 2012 State Conference: January 25-27, Lake Charles, LA
  • iGaming North America: March 4-6; Las Vegas, NV
  • Regional Modeling for Improving Public and Private Policy: March 12, Baton Rouge, LA
  • PARKING!  Can We Do Better for our Communities and Our Businesses?, presented by ULI Louisiana and TMG Consulting: March 13, New Orleans, LA
  • American Council of Engineering Companies Annual Conference and Legislative Summit: April 15-18, Washington, DC
  • Southern Gaming Summit:  May 8-10, Biloxi, MS
  • Airport Minority Advisory Council (AMAC) Diversity Conference: June 9-12, St. Louis, MO
  • ACEC/L Technical Visit and Study Tour: June 19-23, Panama Canal, Panama

Internet Gaming in the U.S.—Past, Present, & Future

In a previous blog entry titled, ‘Status of Internet Gaming in the U.S.,’ we gave you our version of Cliff’s Notes on what has been happening at the state level with regard to Internet gaming.  This time, we will explore the events that led up to the DOJ’s December 23 opinion, and afterwards, explore the DOJ opinion’s potential ramifications nationwide.

Over the years, various federal actions have addressed the issue of Internet and interstate gaming directly.  Below is a brief description of the major ones.

  • The Interstate Wire Wager Act (Federal Wire Act) of 1961:
    • Made it illegal to make wagers on telecommunication systems across state and national borders.
    • Previously interpreted by the DOJ to apply to all forms of online wagering
    • The Unlawful Internet Gambling Enforcement Act (UIGEA) of 2006:
      • Explicitly prohibited businesses to collect revenue from Internet wagering.
      • Immediately scared many Internet gaming operators out of the United States…but not all.
      • Department of Justice Memorandum Opinion regarding Online Lottery Programs (issued in December 2011):
        • Provided a new interpretation of the Interstate Wire Wager Act of 1961
          • Interstate transmissions of wire communications that do not relate to a ‘sporting event or contest’ fall outside the reach of the Wire Act.”

Internet gaming has been around almost as long as the World Wide Web has.  Until 2006, the federal government had no legislation that addressed Internet gaming directly, but it did interpret the Federal Wire Act to prohibit online wagering.  Based largely out of concern that the potential for money laundering was to great in the booming online poker industry, various members of the federal government in the early to mid 2000’s pushed for new legislation which targeted Internet gaming specifically.  The result of this effort was The Unlawful Internet Gambling Enforcement Act (UIGEA) of 2006.

After being passed, the UIGEA shook up the Internet gaming industry.  The new legislation made it illegal for businesses to collect revenue from online wagering.  Several Internet gaming operators fled the U.S. market…but not all.  Some online poker operators believed, through unconventional methods, that they had found legal workarounds to the UIGEA and became giants with continued operations in the U.S. during the later part of the 2000’s.

Fast-forward to April 15, 2011— PokerStars, Full Tilt Poker, and Absolute Poker became household names shortly following the event known as ‘Black Friday.’    Without warning, the DOJ issued a formal complaint against the previously mentioned online poker operators based on the Illegal Gambling Business Act of 1955 and the UIGEA of 2006.  Black Friday knocked the wind out the entire industry.  Several of the founders of the three online poker companies were arrested and key assets such as domain names and bank accounts were seized by authorities.  In complete contrast, and shortly preceding Black Friday, speculation and reports about brick-and-mortar casino partnerships with online operators had been headline gaming industry news.

Two people charged with the DOJ’s Black Friday complaint have already made plea bargains and face sentencing later this year.  To date, the DOJ’s December 23 opinion has not affected the charges levied against the founders of PokerStars, Full Tilt Poker, and Absolute Poker.

As previously mentioned, the DOJ issued a Memorandum Opinion on December 23, 2011 which reversed its previous interpretation of the Federal Wire Act.  The opinion was released as a response to petitions from New York and Illinois’ lotteries seeking permission to sell lottery tickets online.  Prior to the December 23 opinion, the DOJ’s interpretation of the Wire Act would have prohibited online lottery ticket sales.  As of the issuance of this opinion, the DOJ finds that the Wire Act only applies to sports betting, effectively finding it lawful for states to run in-state online lotteries.

If Black Friday knocked the wind out of the Internet gaming industry, the DOJ’s Opinion rejuvenated it.  States, vendors, tech companies, and several other constituents are scrambling now at what they view as a window of opportunity.  As described in our previous blog on Internet gaming, many states are working on implementing their own Internet gaming legislation and programs via their lotteries.  Since interstate wagering already exists in lottery programs like the Powerball, interstate online poker could be legally feasible.

It remains unclear what advantage, if any, the DOJ Opinion provides to Native American tribes looking to get in on the action.  In February 2012, the United States Senate Committee on Indian Affairs will meet to discuss the implications of the DOJ’s Opinion for tribes.

The DOJ did not offer a new interpretation of the UIGEA in its December 23 opinion, nor has its complaint levied against those online poker operators been rescinded.  Nonetheless, several entrepreneurs, social media companies, existing Internet gaming operators and vendors, and other similar entities are creating a buzz as they search for a fit in the states’ race to bring Internet gaming to their jurisdiction.

As exciting as all of this is, there are still a lot of uncertainties.  What will become of the UIGEA, and how will this affect state Internet gaming programs?  Will the federal government pass their own legislation to regulate Internet gaming nationwide in the near future?  In our next blog on Internet gaming, we will discuss what has been going on at the vendor level in lieu of the excitement the DOJ’s Opinion has created.

Contributed by:

Nicholas Farrae

Analyst, Economics & Gaming

nicholasfarrae@tmg-consulting.net  or 504.569.9239 x 31

—–

Disclaimer
The views, interpretations, or strategies expressed are those of the authors, and do not necessarily reflect the position of TMG Consulting. This site is meant for educational purposes only and does not constitute professional advice. TMG Consulting makes no representation as to accuracy, completeness, or suitability of any information on this site and will not be liable for damages arising from its display or use.

The Outlook for Asian Gaming

Attention has been given to the rise of Asia’s booming gaming market in recent years, with some analysts even projecting it to surpass all other regional gaming markets before the decade’s end.  The success of Macau and Singapore has inspired other parts of Asia to either enhance their existing gaming industry to a world-class standard or to establish their own destination gaming markets.

The Philippines and Vietnam, both countries with existing gaming facilities, have passed legislation to support a destination resort casino market.  South Korea may follow their lead.  In other parts of Asia without Las Vegas-style games, such as Japan and Taiwan, things have been heating up with legislators and other constituents seriously considering gaming’s benefits.

Asia’s gaming fever mirrors that of the United States.  In recent years, several states in the U.S. implemented gaming legislation or expanded existing games.  Some U.S. gaming markets could even be described as saturated.  In the Mid-Atlantic region for example, gaming facilities in Delaware, Pennsylvania, New Jersey, New York, West Virginia and Maryland are in heavy competition for the same regional patrons and tourists.  Delaware and Pennsylvania added table games to their facilities, at least partially pressured by a congesting regional market.

The key difference between the pervasion of gaming throughout Asia and the United States is demand.  According to Credit-Suisse’s Global Wealth Report 2011 there are about 949.7 million people living throughout North, Central, and South America.  Throughout the entire Asia-Pacific region (includes China and India) there about 4.25 billion people.  The population of the Americas is not even a quarter of the population of the Asia-Pacific region.  Trying to imagine how much gaming product it would take to saturate the Asia-Pacific region is staggering.

A huge driver behind the success of Macau and Singapore’s gaming markets has been Chinese tourism.  Chinese policy changes opened up its outbound tourism market and greatly increased the proportion of Chinese visitors to all visitors in several regional markets.  Singapore for example, drew about 5.6% of its total visitors in 2000 from China.  In 2010, Chinese visitors to Singapore represented about 10.3% of all visitors to the country.

Asian gaming markets have another thing going their way—Asia is becoming wealthier.  Based on projections made by Credit-Suisse and detailed in their World Wealth Report 2011, wealth in the Asia-Pacific region (including China and India) is increasing at a greater rate than the world’s two wealthiest regions (Northern America and Europe) and the world’s average.  As the average wealth of individuals increases throughout the Asia-Pacific region, more and more people will have the means to indulge in leisure activities and travel—increasing regional demand for destination resort casinos.

With such trends in wealth, tourism, and population it is little wonder that destination gaming has been such a success in Asia in recent times.  It is also no surprise that many other Asian countries want in on the action, and that they are not trying to follow the ‘Las Vegas Model,’ but either the ‘Singapore’ or ‘Macau Model.’

Contributed by:

Nicholas Farrae

Analyst, Economics and Gaming

nicholasfarrae@tmg-consulting.net  or (504) 569-9239 x 31

Disclaimer
The views, interpretations, or strategies expressed are those of the authors, and do not necessarily reflect the position of TMG Consulting. This site is meant for educational purposes only and does not constitute professional advice. TMG Consulting makes no representation as to accuracy, completeness, or suitability of any information on this site and will not be liable for damages arising from its display or use.