Asian casinos woo Chinese as corruption drive hits Macao
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E-mail China Daily via agencies, March 23, 2015
At the oceanfront Ramada Plaza hotel on South Korea's Jeju island, about a hundred Chinese gamblers huddle around felt-topped tables, wagering as much as 5 million won ($4,500) at baccarat. Shouts in Mandarin - "Beautiful!", "Good!" - ring out as gamblers with winning hands slam their cards on the green table-tops.
Asian casino operators from South Korea to Australia are pulling in the Chinese mainland's gamblers as Beijing's corruption crackdown scares many away from Macao, the world's biggest gambling hub. They are capitalizing on a downturn in the city's gaming industry, which last month suffered its worst drop ever.
Operators such as Paradise Co in South Korea are hiring Mandarin-speaking staff and offering VIP treatment including free flights, limousines and hotel stays to big spenders. Echo Entertainment Group Ltd of Sydney and NagaCorp Ltd in Cambodia cater to the junket operators who organize trips for Chinese gamblers with perks such as higher commissions, lower taxes and private jets.
"Premium mass players can be recognized as VIP players and treated better than in Macao," said Lee Hyuk-byung, vice-chairman of Paradise, in an interview in Seoul. "And we have other attractions in Korea such as culture, fashion, food."
Macao's casino revenue fell last year for the first time and may decline another 8 percent this year, according to analysts surveyed by Bloomberg. By contrast, South Korea and the Philippines will grow 16 percent and 33 percent respectively this year, gaining from the spillover of Chinese gamblers, Deutsche Bank analyst Karen Tang wrote in a note.
The Chinese government has urged Macao, the only place in China where casinos are legal, to diversify from gambling. Macao's government imposed more scrutiny over junket operators, as mass market gambling also weakened amid China's economic slowdown, and new restrictions on visas and cigarette smoking.
"The anti-corruption measures are discouraging some people from travelling to Macao, and as a result we are seeing a slight shift in travel from Macao to other destinations," said Aaron Fischer, a Hong Kong-based analyst at CLSA Ltd.
"Vietnam and the Philippines will likely benefit as they are the closest. South Korea will pick up people in the northern parts of China."
Gamblers who bet at least $50,000 at Paradise's casinos qualify for freebies usually available only to VIP players, Lee said. In Macao, the minimum needed to get similar perks from junket operators is about $500,000, according to CLSA data. The company also draws Chinese gamblers to the celebrity-obsessed country by touting its pop culture and offering recommendations of top South Korean plastic surgeons, Lee said.
It is illegal for foreign companies to advertise casino operations in China and Paradise avoids public solicitations, said Lee, vice-chairman of Paradise.
Its staff reaches out to highstakes gamblers recommended by existing customers and makes frequent trips to major Chinese cities including Beijing and Shanghai, he added.
Companies are able to sidestep the mainland's ban on casino marketing by advertising non-gaming aspects such as a concert or entertainment show held on its venue, said Grant Govertsen, an analyst at Union Gaming Group in Macao.
Manila's members-only Signature Club in Melco Crown Entertainment Ltd's City of Dreams casino has entrance signs in both English and Chinese, while Mandarin-speaking staff direct guests to cashiers, shops, and restaurants. The neighboring Solaire Resort and Casino owned by Bloomberry Resorts Corp has suckling pig and Peking duck on the menu, catering to Chinese palates.
"There are a lot of excuses to go to the Philippines; we always promote the Philippines not on the casino but the whole package," Cristino Naguiat, chairman at gaming regular Philippine Amusement& Gaming Corp, said.
"Even with the crackdown in China, we still had higher volume in terms of gross gaming revenue and in terms of junket and VIPs," he said last month in Manila.
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