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China gamblers go to Vegas as spending crackdown hits Macau

HONG KONG — China’s high-spending gamblers are looking to bet outside Macau amid a government assault on corruption and extravagance, in the process boosting casinos from the Philippines to the Las Vegas Strip, the Bloomberg news agency reported.

A croupier sits in front of a gaming table inside a casino in Macau in this May 15, 2011 file photo.  Photo: Reuters

A croupier sits in front of a gaming table inside a casino in Macau in this May 15, 2011 file photo. Photo: Reuters

HONG KONG — China’s high-spending gamblers are looking to bet outside Macau amid a government assault on corruption and extravagance, in the process boosting casinos from the Philippines to the Las Vegas Strip, the Bloomberg news agency reported.

Visitors from China are lifting gambling growth in Las Vegas while casinos in Melbourne and Manila are fighting over Chinese VIPs with frills from private jets to suckling pigs. That is while Macau, the one place in China where casinos are legal, has suffered three straight months of declining gambling revenue as the anti-graft crackdown shows no signs of abating.

Casinos’ revenue on the Las Vegas Strip has gained 3.7 per cent to US$3.7 billion (S$4.7 billion) in the year to end-July, according to Mr Robert Shore, a Las Vegas-based analyst at Union Gaming Group. This indicates ‘’an inverse correlation’’ with the weaker performance from high rollers in Macau, he said in an e-mail.

Junket operators, which organise casino trips for wealthy Chinese VIPs, are bringing those gamblers to other locations such as Australia, Europe or the US, according to Credit Suisse analysts Kenneth Fong and Isis Wong. That allows the players “to avoid frequent appearance in Macau in light of the current sensitive political situation,” they said in a research note.

To fight the decline in revenue from high-stakes bettors, Macau casinos are allocating more resources to luring so-called mass-market gamblers, who bet in cash.

Mass-market gamblers tend to provide wider margins than high rollers as VIP customers typically rely on credit from junket operators, who in turn collect commissions from casino companies.

The mass market shift “is turning out to be quite lucrative and less volatile than the VIP business,” said Mr Mark Mobius, Chairman of Templeton Emerging Markets Group.

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