Macau casino operators fear possible cap on number of electronic table games

TAGs: electronic table games, francis tam, Francis Tam Pak Yuen, gaming table cap, Macau, table cap

macau-eleectronic-table-game-capFresh off yet another record revenue year, Macau has reportedly started 2014 on a roll. With the Chimelong Ocean Kingdom theme park set to open on nearby Hengqin Island, analysts expect Macau’s casinos will welcome at least part of the additional tourist influx, possibly pushing January’s monthly revenue tally up as much as 18% over the previous year. And with the Lunar New Year festivities kicking off Jan. 31, the momentum will roll right on into February.

But all is not well in paradise. The calendar had barely flipped to January when Secretary for Economy and Finance Francis Tam Pak Yuen announced that the government was considering a cap on the number of allowable electronic gaming machines, like the infamous live dealer gaming table cap that is the bane of every growth-addicted casino operator in the world’s top gaming hub. Secretary Tam made the comment in response to a query from a Legislative Assembly member who noted a significant increase in Macau casinos’ overall slots revenue.

Macau has made no secret of its desire to limit the presence of slots in residential areas. The past year witnessed the closing and/or relocation of several of Melco Crown Entertainment’s Mocha Club slot parlors and SJM Holdings’ slots-only facilities, and Tam said the long term plan is to strictly confine slots to actual casinos. A formal request to shut down the remaining slots-only venues will be made in 2015 when Macau begins negotiating the first of its casino concession renewals. Those negotiations may also include a new cap on slots inside casinos.

But hold the phone. In answering the legislator’s question, Tam used the phrase “electronic gaming machines” (EGM), not slots. Tam noted that today’s EGMs aren’t like the slot machines of old and suggested that EGMs might rival live dealer table games for Macau preeminence in another decade or two. Now casino bosses are wondering whether Tam’s definition of EGM includes the live dealer electronic table games (ETG) that serve up to 50 gamblers at a time via electronic betting and money-collecting stations.

Regardless of how many customers they serve, these ‘hybrid’ ETGs only count as one gaming table under the cap, so casinos have been frantically installing the devices to maximize profits while adhering to their mandated table allotment. Regulators are slowly catching on that they’re being punked, hence the public shot across the bow warning the casinos that their electronic party may be over.

But critics say the ETGs are necessary to mitigate the cap’s collateral damage. What began as a way of ensuring that Macau’s casino market didn’t overheat has morphed into a form of class warfare. There are simply too many bums for too few seats at Macau’s baccarat tables, and this seller’s market has allowed the casinos to raise their minimum bets fivefold over the past six years, pricing many gamblers out of the market. The casinos say ETGs offer a way back in for the unwashed masses – like those about to descend on Macau at the end of January – while allowing the casinos to reserve the actual felt tables for their high-rolling VIPs. Win-win?


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