CASINO

Asia to rival US by 2014; Resorts AC gets 1920’s makeover; Ontario casino losses

TAGs: Asia, Atlantic City, Macau, Ontario

land-casino-newsA new study by professional services firm PricewaterhouseCoopers (PWC) suggests that the Asian and Australian gambling industries will draw close to parallel with the US-based industry by 2014. In 2009, gambling action in Macau, Singapore, South Korea and Australia accounted for $21.8b in revenue, whereas US gambling revenue for 2009 was $57.2b (of which $26.5b came from Indian gambling).

By 2014, PWC expects Asia/Australia to rake in $62.9b compared to America’s $68.3b. In percentage terms, that’s 19% growth for America, 288% for Asia/Australia over the same period. PWC also says Macau will grow 25% in each of the next five years, reaching $45.1b in 2014. That would rank it above commercial (non-Indian) gambling in the US.

Another study, this one by Spectrum Gaming Group, claims that the amount of time gamblers spend inside Atlantic City casinos has fallen by 22% in the last four years, and the amount of dollars they drop is off almost 30% during this period. Across the board, gross operating profit per visitor hour went from $2.74 in 2006 to $1.05 in Q3 2010 – a plunge of 61%. The study chose late 2006 as its starting point in order to spotlight the impact created by the opening of the first slots parlors in neighboring Philadelphia.

Dennis Gomes, the new owner of the troubled Resorts Atlantic City, is promising his new digs will become AC’s “most energetic and unique casino.” Part of Resorts’ promised uniqueness will come by shamelessly copying a little of (HBO series) Boardwalk Empire’s style. Resorts is scheduled for a Roaring 1920’s makeover, including employees in period dress, to be completed by Memorial Day.

That said, Gomes seems to be planning the revamp using a 1920’s budget. “It’s not going to be the fanciest place. It’s going to be the friendliest place.” Problem is, Resorts is currently the least profitable place, at least in terms of AC’s gaming establishments, which is why it was available for a mere $31.5m. So what will Dennis do if Season 2 of Empire is a dud, making the makeover seem like last century’s news? Hey, Dennis, I hear that Glee show’s pretty popular… Why not teach all the employees to sing and dance in unison and… Oh, never mind.

North of the border, Ontario’s four largest private casinos lost a total of $75m last year. Compare that to a 2001 profit of $449m, and clearly, something’s changed. Part of the blame goes to gaming facilities opening on the US side of the border, allowing the Yanks to spend their casino cash closer to home. Naturally, those dastardly international online gaming operators get the bulk of Ontario’s venom, with the provincial auditor general claiming they took $400m out of Ontarians’ pockets last year. But just wait until 2012, when Ontario Lottery and Gaming Corp. hangs out its own online shingle. Then all of Ontario’s online gamblers – seriously, all of them — will automatically switch over to OLG. The gap will be closed, coffers will overflow, and all will be right with the world again. The end.

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