Despite having only one-tenth as many hotel rooms as Las Vegas, the enclave of Macao is feeling the pressure to develop a more tourism-oriented business model. China’s president, 
Xi Jinping visited Macao last weekend and dropped a few strong hints. His desire: “to focus on building a global tourism and leisure centre and to promote appropriately diversified and sustainable development.” He warned that “while Macao has enjoyed rapid economic development in the past years, certain deep-seated problems have surfaced and development risks have also built up.”
Prior to President Xi’s speech, Central People’s Government Liaison Office Director Li Gang was less roundabout, telling the New York Times, “The dominance of one industry can lead the city to prosperity, but it also can lead to its demise.” Li, Xi and others would seem to 
prefer a more middle-class-dominated Macao, with greater emphasis on sightseeing, less on gambling. With 80% or more of the economy driven by gaming, that’s not an easy or overnight solution. Attempts to broaden the Macanese appeal have been spasmodic — the failure of Cirque du Soleil‘s Zaia lingers in the memory. But operators are not so easily deterred. Reports the Times, “Casino resorts are using diverse approaches — like Shrek-themed breakfast buffets for families and boxing title fights — to attract mainland Chinese visitors who will spend at least some of their vacation money away from the tables.”
Although Macao is being pressured to be more like Las Vegas, it may have to watch against things — like high table minimums — that keep cost-conscious tourists away. With the opening of Las Vegas Sands‘ Parisian coming at the end of what is expected to be a flat 2015 and leading a wave of new megaresorts into the market, Macanese operators are going to need every trick in the book as they more fiercely compete with themselves.
* One Macao operator who’s branching out elsewhere is Stanley Ho‘s SJM Holdings. The new target of opportunity is South Korea. Paradise Co. and Sega Sammy Holdings Inc. are building a $1.2 billion casino, Paradise City, near Incheon International Airport but need casino-running expertise. Enter Ho’s company, sources say. It’s adjacent to the Caesars Entertainment/Lippo Ltd. project but will be open roughly a year earlier. Sega Sammy, a panchinko manufacturer, is hoping to leverage SJM’s brand equity with Chinese gamblers, Seoul‘s customer of choice.
“A spokeswoman for SJM declined to comment, while Lee Sang Yeon, planning department executive director at the venture between Paradise and Sega Sammy said the report is ‘unfounded,'” reported Bloomberg News. For all its cost, the casino will be small by American standards: 160 tables and 350 slot machines.
* Another Communist stronghold that could be penetrated by the gaming industry is Cuba. If moves to normalize relationships between the U.S. and Cuba succeed, it’s expected that gambling could return … but not for a decade. “So many steps would need to be taken before it becomes a realistic pursuit,” said Spectrum Gaming Group‘s Michael Pollock.
* Last week’s casino approvals in New York have sent the Wall Street Journal‘s Jason Riley into a fierce snit.
