I'll bet it is an expensive excursion.
"Mass. must vie with Asia for casino investors" December 21, 2011|By Casey Ross
As far as casino proposals go, this is as big as it gets: A $4 billion resort with three hotels, more than 90 luxury retail stores, and enough slot machines and table games to fill a pair of Walmart supercenters.
It is the latest creation of casino mogul Sheldon Adelson, and it is nowhere near his native Massachusetts.
Related: Globe Interviews Gambling Mogul
More: Sheldon Adelson
Adelson is building his Sands Cotai Central resort in Macau off mainland China, the epicenter of a rapidly expanding Asian market where he and other US casino operators have made billions of dollars in recent years.
The growth in Asia has caused a seismic shift in the gambling industry, leaving Massachusetts competing for limited investment dollars not only against its Northeastern neighbors, but also against a powerhouse across the world that is churning out bigger resorts and promising much bigger profits.
Macau alone is projected to generate about $30 billion in revenue this year, five times the $6 billion expected from casinos on the Las Vegas strip. Massachusetts has attracted proposals from a wide array of casino operators, but success here depends on the state’s ability to translate that initial interest into the kind of large-scale resorts that will generate the most jobs and tax revenue.
“There is a market in Massachusetts, but you’re not going to see the kind of investments happening in Asia,’’ said Mark Nichols, an economics professor at the University of Nevada, Reno. He added that the rise of Asia has even dented growth prospects in large US markets like Las Vegas.
“A lot of the high-rollers that used to come to Vegas are now going to Macau or Singapore,’’ Nichols said.
Still, many industry specialists said that Massachusetts remains a top US market and will probably get significant investments. The question is whether the state will ultimately benefit from a competition between Adelson and Steve Wynn, the industry’s two biggest operators, and generate enough additional interest to ensure that, if one or both drops out, the state will still get proposals in excess of the $500 million minimum set by state lawmakers.
“Competition is key to the success of casino gaming,’’ said Denise von Herrmann, a provost at Oglethorpe University in Atlanta who has tracked the gambling industry for two decades.
She said Massachusetts offers large casino companies a chance to diversify operations so they are not invested too heavily in a single market. On the other hand, she noted, it is a smaller market where state officials have pledged to keep a tight lid on the number of facilities and how much they are allowed to grow, which could discourage bold, expensive proposals.
The state also faces competition from potential gaming expansions in New York and Florida, and governments in Asian countries such as Japan and South Korea are also considering legalization of new gambling resorts. The market in Japan alone is estimated to be worth $44 billion.
Related: Slot Machines Shorted Floridians
N.J. casino tells applicants jobs come with time limits
Shiny happy people serving the slobs at the casino, 'eh?
Those opportunities are generating intense interest from an array of US gambling companies. Wynn, who has proposed a $1 billion casino across from Gillette Stadium in Foxborough, is preparing to build his third casino in Macau and has even floated the idea of moving his company headquarters there from Las Vegas.
Related: Kraft Picks a Wynner
He is also lobbying for gambling expansion in Japan, as is his longtime rival Adelson, who said in a recent conference call that Asia is his “first choice’’ for development of casinos.
“Everyone knows we are the most probable winner of any competition [in Asia],’’ Adelson said in the Oct. 27 call, adding that his firm is “not that enthused’’ about potential opportunities to build resorts in Massachusetts and Florida....
The call was a few weeks before Massachusetts approved a gambling expansion, and a spokesman for Adelson’s company, Las Vegas Sands Corp., has since said the firm is still considering development opportunities in the state. “There are a variety of factors that go into it, and we’ll continue to follow our process as it relates to Massachusetts,’’ the spokesman, Ron Reese, said. In 2007, when expanding gambling was gathering momentum on Beacon Hill, Adelson pitched the idea of a casino in Marlborough.
They are going to bring Asia to you!
The extent of competition here will begin to become much clearer in the months ahead....
Meanwhile, the opportunities for growth in Asia appear boundless. Macau’s projected $30 billion in revenue is a record for that market, and several analysts have estimated that it will increase by as much as 25 percent next year.
Las Vegas Sands, Wynn Resorts, and MGM Resorts International are the only three US companies operating in the former Portuguese colony, which has more than 30 casinos. In its most recent earnings call, an executive with Wynn Resorts said the market’s expansion is just beginning....
In his third-quarter earnings report to stock analysts, Adelson and other executives emphasized the firm’s strong financial performance at resorts in Asia. For example, the company reported a total of $388 million in operating income at its three Macau casinos. By contrast, in Pennsylvania, where Adelson and partners developed the $800 million Sands Bethlehem, operating income for the quarter was about $25 million.
Also see: A Big Fat Front-Page Lie
Now pull the lever.
--more--"
