$45.2 billion. That’s a pretty big number and one that will probably have no chance of ever being challenged.
Unless, of course, you’re Macau, which has done a remarkable job of upping the ante as far as annual casino revenues are concerned.
To think that there’s actually a race here is beyond stupid; not when the locale that posted the second highest annual revenue in 2013 – that would be you, Las Vegas – only posted $11.2 billion, less than a quarter of what Macau hauled in the same year.
But, and admittedly, it’s a stretch of a but, you can’t help but wonder how other countries can compete with the juggernaut that is Macau. Is there even another jurisdiction that can even surpass Nevada and challenge Macau?
There’s an answer to that question (probably) but one that can’t be answered in the near future. After all, when you’re talking about challenging Macau, that’s like saying you can threaten Usain Bolt in a 100-meter sprint.
Before trying to figure out the said answer, its important to remember that the rise of casino gambling in Macau was as dramatic as it was unprecedented. To put things in their proper context, Macau’s gaming revenue in 2002 was a measly $2.8 billion, a little over half of what casinos on the Las Vegas Strip earned and a less than a third of what the whole state of Nevada raked in.
Move the calendar to 2013 – 11 years – and Macau’s gaming revenue for the year was four times what Nevada earned in the same time. Las Vegas-based companies like Las Vegas Sands, Wynn Resorts, and MGM Resorts International will probably be a little more diplomatic about this, but they’ll tell you that their Vegas casinos have become afterthoughts to their real crown jewels: their opulent and glistening resorts in Macau.
Geography and economics are two huge factors and a lot of these US operators have come to concede those points. Speaking about the former, you can’t beat the Chinese in population. It’s just not happening. And you can’t beat their love of gambling. So when you supposedly have more than 3 billion people within a short flight away from Macau, there’s no way Nevada is competing with that.
Plus, a lot of these people, mostly the Chinese, are avid gamblers with throngs of money to spend. Again, Nevada can’t compete with that, especially after it has spent the better part of the past few years still trying to get its feet back after the economic crisis of 2008.
So with Nevada out of the equation, is there reason to believe that some other jurisdiction can compete with Macau the way nobody else has been able to?
One place comes to mind and ironically enough, it’s also a stone’s throw away from the Chinese gaming capital.
Here’s the caveat: Japan has yet to legalize casinos so this hypothesis is actually based on the premise that the country will finally open its doors to gambling joints sooner than later.
But if it does, look out Macau.
The massive interest in Japan from some of the biggest casino operators in the world, including those Macau-based companies, is all too real. You can understand why too because a lot of people consider Japan as the last gaming frontier, home to millions of Japanese who like their Chinese counterparts, love to gamble and more importantly, have the money to do so.
So when operators start throwing out investment figures like $5 billion or $10 billion, you know that there’s real interest there, so much so that the potential goldmine of gaming revenue riches in Japan has been estimated to reach in excess of $40 billion by experts during the CLSA Asia-Pacific Markets forum in Tokyo.
At the same time, when you have a market that’s already being sniffed around by potential investors even before the legislation legalizing casinos in the country is final, it’s already a foregone conclusion that when Japan finally opens its arms to casinos, there’s going to be a long queue of operators salivating to get their hands on one of those golden casino licenses.
And when that day comes, you can bet that Macau will be keeping an eye on the East to see how the casino industry grows in the Land of the Rising Sun.
It’s too early to say that it’ll happen given the potential for continued growth in Macau, but rest assured, Japan will do to it what Nevada, Singapore, and all other jurisdictions couldn’t do.
Make it sweat.