The Asian casino boom is running hot and likely to continue, despite a few hiccups, although investors should be warned: the chips may move around the table from player to player.
Just three years ago, casino gambling came to Singapore. Now that country boasts two of the world’s most profitable casinos: Genting Singapore’s Resorts World Sentosa and Las Vegas Sands Corp.’s Marina Bay Sands. The trend is likely to continue; such prosperity has not gone unnoticed, with Prime Minister Shinzo Abe of Japan indicating that he’s open to legalizing resort gambling to promote economic growth.
As Abe rose to power in Japan, his Liberal Democratic Party (LDP) was revived as well. It had supported casino gambling in earlier days. Now the LDP is in a better position to legalize gambling as a way to promote tourism and boost the Japanese economy. While Abe’s emergency stimulus measures did not specifically mention legalizing gambling, they did spell out the need to encourage business investment and create jobs; they also mentioned promoting tourism. Casino resorts would do all three.
Japan isn’t the only country to consider casinos to boost income; the Philippines, South Korea, Taiwan and Vietnam are also reviewing past attitudes toward gambling within their borders.
The issue isn’t all rosy, of course. Singaporean casinos have had some issues with high-stakes Chinese gamblers, who make up some 50% of VIP players in Singapore, running out on gaming debts. While international market agents (a.k.a. IMAs or junket operators) take care of problem debts in Macau, Singapore has no such arrangement. It has only three licensed IMAs, compared with Macau’s couple of hundred.
Macau, on the other hand, which, as recently as 10 years ago, was a gang paradise with a heavy triad presence that went after gambling debts very effectively, has worked hard to shake its unsavory aura in the wake of the Chinese government’s strenuous efforts to clean the place up. It’s been suffering its own press nightmare as the taint of Macau gang activity resurfaced in a lawsuit against the Sands, in testimony by Sheldon Adelson.
The suit concerned the casino license won by the Sands together with former Sands partner and casino operator Galaxy Entertainment Group. Adelson alleged that Galaxy had said it would do business with people tied to, or reputedly tied to, triads, and that made it impossible for Sands to work with Galaxy. His Las Vegas courtroom testimony made front-page news in Macau, where its potential for reputational damage shocked casino owners. Macau gambling puts Las Vegas completely in the shade; the former brought in $38 billion in 2012. Las Vegas only managed $6 billion.