AN ASIAN casino renaissance is at hand. A slew of Asian governments are considering allowing casinos to operate on their own soil, seduced by the huge amounts of tourist dollars and tax revenues that they stand to gain, not to mention reducing the outflow of funds to other countries that run casinos.
These governments seem to be getting over the worries of social ills that casinos presumably bring, recognising that legalising gambling would also have the positive effect of curtailing the illegal casino operations in their backyards. One report states that `billions of dollars' circulate through illegal casinos in Asia.
If and when this new casino supply comes on board, it will have an impact on the dynamics of the Asian casino industry.
At present, only a few casinos in even fewer Asian countries have a monopoly on Asian gamblers. Industry estimates show that 85% of Asia's legal casino industry is currently divided between Philippines, Macau, South Korea and Malaysia. Left out are countries like Singapore, Thailand, Indonesia, Taiwan and Japan, all of whom have never issued casino licences.
In some of these countries, the ban on having casinos has had the natural consequence of illegal operators cashing in. Since they don't pay taxes and conduct business according to their own rules, and if these governments legalise casinos, the thinking is that this would constrict the illegal gambling dens and earn tax revenues in the process.
And there is a lot of money to be made because of the mammoth size of the business. Consider these facts - 35% of Macau's Gross Domestic product (GDP) comes from the casino business while 69% of the country's total tax revenues come from gaming taxes, according to a recent report on the gaming sector by Singapore-based GK Goh Research Sdn Bhd. Closer to home, Singaporeans spend about S$180 million in Malaysia's Genting Highlands casino every year, S$140 million in Indonesia's Batam island casino and another S$400 million on casino cruises, reveals the research report.
Annual gaming revenues of casinos in Macau tip US$ 3.57 billion, while the figure is US$ 0.63 billion for Malaysia and US$ 0.32 billion for the Philippines, according to GK Goh Research estimates.
A casino conference held in Singapore in June this year estimates that the casino industry in Asia is worth about US$ 14 billion a year and looking at how illegal gaming has thrived in China, Vietnam and even Singapore indicates a lot of room for legalised gaming to grow. By 2010, Asians are expected to spend US$ 23 billion on gambling in the region and beyond, industry experts at the conference predicted.
Asians love to gamble
Surveys on gambling habits around the region show Asians' determination to pursue their love of the punt regardless of whether it is sanctioned by law. One study by Chulalongkorn University in Thailand, for example, found that the Thais lost 518.6 billion baht (US$ 12.2 billion) in 2001 to underground lotteries, overseas and illegal local casinos, soccer betting and other illicit gambling. Other reports coming out of Thailand show that an estimated 500,000 Thais flock every year to casinos across the border in Cambodia, Laos and Myanmar, many of which operate in a grey area of legality.
China's burgeoning middle-class
In Asia, there is growing acceptance of gambling as a legal form of leisure and entertainment. This ties in with a growing Asian middle class, who in turn have a bigger propensity to gamble, note analysts. The strong economic growth in the region is the reason for the latter. Also not forgetting is the improving tourism infrastructure, particularly the emergence of budget airlines serving Asian routes. Using a comparison of casino spend versus GDP, the research analyst at GK Goh Research points out that Chinese punters hold the biggest potential to be tapped as the estimated legal casino spending by the Chinese population is only 0.07% of GDP, much lower than the United States' (US) 0.28%, Malaysia's 0.27% and Australia's 0.37%.