In this interview with CalvinAyre.com’s Stephanie Raquel, GamePlan Consultants founder Sudhir Kale talks about the future of gaming in Macau and why the city state is better off not being compared to Las Vegas.
Due to the continued gaming downturn, Macau is currently being pushed to entertain at a larger scale follow the footsteps of Las Vegas, which has evolved from a gambling town into an entertainment destination.
For GamePlan Consultants founder Sudhir Kale, however, it’s a mistake to compare Macau with Las Vegas.
“I’ve always said that, you know, the comparison with Las Vegas is erroneous to begin with,” Kale told CalvinAyre.com, explaining that in terms of visits, Las Vegas is clearly a “destination,” whereas “Macau is more of a day tripper’s choice for gaming.”
“Sixty-eight percent of the people who come to Macau are day trippers. [In] Las Vegas, the average visitation there, people stay there over four nights. The number of visitors per room, you find that it’s about 1.3 in Las Vegas, 0.3 in Macau,” Kale said.
Currently, there is a push among local players to find an offering “above and beyond casino gaming” to keep customers, particularly the mass market clientele, coming to the city state. But Kale believes the push is more from the government side, and the operators were asked, they would still continue to invest on the gaming side.
“More than 90 percent of the revenue, 90 percent of the profits come from gaming, so clearly this is a big gaming-driven market unlike any other. Furthermore, the location of Macau there are so many other places people can go to for nongaming experiences. You have Hong Kong with Disneyland, you’ve got Singapore. You got Malaysia, so very interesting choices in terms of places to go for nongaming amenities and nongaming entertainment, whereas Macau is the only one which is pretty much all gaming so that’s what people come here for,” Kale said.
The gaming expert also advised operators to focus more on the mass market.
“Right from day one, mass markets should’ve been the segment of choice for Macau operators because though the VIP revenues are huge, 70 percent of the revenues came from VIP and 30 percent came from mass but if you look at the profitability 70 percent come from mass and only 30 percent from VIP. No. 2, the VIP segment can also be somewhat risky to cater to… if the high rollers get on a roll, they can destroy your profitability just as easy as you can create it, whereas the mass market, their bank is going to run out way before the casino’s bank is going to run out. There are no threats because they gamble with small amounts,” Kale said.
Incidentally, the current state of Macau’s gaming industry is expected to be among the topics to be discussed at the upcoming iGaming Asia Congress, and the CalvinAyre.com team will be there to provide an extensive coverage of the discussions straight from the event’s floor.