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Macau Remains Gambling-First Destination Despite VIP Departures

Macau is in the midst of its third straight year of gaming revenue declines and will post yet another consecutive down year when 2016 is all said and done.

Billionaires like Sheldon Adelson are betting that Macau remains a vibrant destination for gamblers and tourists alike, and hopes his Parisian’s Eiffel Tower replica will continue to captivate guests. (Image: Anthony Wallace/Getty Images)

China’s wishes to impede money moving out from its mainland through the special administrative gaming zone have been successful, and that’s forced many casino resorts in Macau to overhaul their brands. But regardless of the fact that gaming revenues have plummeted from $45 billion in 2013 to $28 billion last year, for now gambling remains the city’s primary attraction and the bettor still reigns supreme in the eyes of casino companies.

VIPs and whales are taking their bets elsewhere as fears of being arrested by Chinese law enforcement agencies rise. Junket and touring operators that brought wealthy citizens to Macau on commission by the casinos have closed up shop.

For companies like Las Vegas Sands, Wynn Resorts, MGM and others that have billions invested in Macau, shuttering their doors simply isn’t an option. Instead, they’re slowly changing their marketing to appeal to a wider base of visitors, and that includes the entire family.

“For the next few years Macau will remain a gambling destination,” Asian casino industry analyst Paul Broberg told the South China Morning Post this week. “However, if you take a long-term view . . . I definitely see Macau being an entertainment destination.”

All Visitors VIPs

The saying “quality, not quantity,” is certainly holding true in Macau. While gaming revenue is down due to high-rollers taking their bets elsewhere, overall visitation numbers are actually up in the city.

Las Vegas Sands’ $2.7 billion Parisian Macau and Wynn’s $4.4 billion Wynn Palace are two resorts to open in 2016 that were conceived before China’s corruption crusade began. Both properties integrated more family friendly attractions.

Sheldon Adelson’s Parisian has a waterpark and half-scale Eiffel Tower replica, while Wynn Palace comes with an eight-acre “performance lake,” aerial zip line, and hot air balloon rides.

Adelson, one of the world’s 25 wealthiest people, remains confident in Macau.

“We will see growth in Macau,” Adelson said during his property’s September opening.  “The Parisian Macau caters well to both the current Macau market conditions and the long term growth trends in Chinese outbound tourism.”

Not-So Crowning Achievement

Like Sands and Wynn, Melco Crown Entertainment was also in the process of building a resort to compliment its City of Dreams and Altira Macau venues before China’s VIP assault. Melco Crown is a joint venture between Melco International Development and Australian-based Crown Resorts.

Crown Resorts has been in the news recently for China’s capturing of 18 of its employees on allegations of committing gambling crimes. Three Aussie citizens have officially been charged and are likely to spend the next six months in the gruesome Chinese prison system.

VIP manager Jason O’Connor is one of those three Crown employees. Reports have surfaced that Crown was routinely marketing their Australian casinos to Chinese nationals and organizing trips Down Under.

Chinese law bars companies from marketing gambling games to its citizens. But that was a risk Crown was apparently willing to take in order to grab the billions of VIP wagers no longer being placed in Macau.

Crown hasn’t released any statement regarding the formal charging of three of its Australian employees.

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