It seems that Las Vegas casino operators are looking for customers beyond the borders of the Silver State yet again. First it was MGM/Mirage acquiring an online casino license from the Isle of Man. Now five Vegas gaming companies are looking at setting up shop in the former Portuguese colony of Macau.
The opportunity arose when casino tycoon Dr. Stanley Ho's forty-year gambling monopoly in the territory came to an end in 2001. Three casino licenses are now available and there are 20 companies from around the globe bidding for the 25-year licenses.
Macau became a Special Administrative Region of China in 1999, and has a fair amount of autonomy over internal affairs. Like Hong Kong, Macau isn't subject to China's economic policies; capitalism is alive and well in the territory and casinos are a multi-billion dollar business.
U.K.-based Aspinalls is one of the familiar names in the hunt for a license, but Vegas companies are leading the charge. MGM/Mirage Macau, Asian American Entertainment Corp., Lucky 9 Casino Corp., Wynn Resorts Ltd., and MP Entertainment (a Park Place Entertainment / Mandalay Resort Group joint venture) all have their names on the list of potential candidates.
That doesn't mean they're going to get in, however. Ho's STDM group is expected to get one of the licenses and MGM/Mirage will likely get the second, leaving only the third up for grabs. MGM is reported to have been willing to spend US$2 billion to operate casinos in the territory, and it will be hard for the people in charge to ignore those kinds of numbers.
Two-thirds of Macau's annual revenue from a 35-percent betting tax, and these new ventures stand to substantially increase that amount. They will also attract more tourist dollars and international corporations to the region if the government can actually turn Macau into an Asian version of Las Vegas.
Based on the number of applications, U.S.-based companies seem anxious to oblige. Overseas operations will broaden their reach and attract new customers, and more customers means more revenue at a time when many Las Vegas casinos are suffering from the current economic downturn.
Whether this move to broaden revenue streams will necessarily lead casinos to seek out online wagering licenses - such as MGM, Littlewoods, and SunOnline did in the U.K. - is up for debate, but it does signal a shift in their reliance on revenue from Nevada casinos. And it isn't a particularly large jump from there to Internet casinos, especially if MGM's new online venture goes well.
Casino license winners are expected to be announced in February.
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