Competition on the Horizon for Macau’s Gambling Industry?

It’s no big secret that Macau’s biggest opportunity for investors is in gambling, and everything else that involves servicing the gambling industry, and it’s been this way since 2002. I’m starting this column with an eye towards looking under the hood of this fabulously entertaining country, and ferreting out a few good ideas for those interested in making money here. I’ll also be paying a visit very soon, and will share my view of the sights and sounds of what many call the “Las Vegas of the East.”

Almost all of Asia is seeing good growth patterns, even during the current US-based economic recession. Yes, that’s right, I said it, the US is in a recession. The Fed hasn’t officially proclaimed it yet, but it’s only a matter of time. Already, as a Westerner living part-time in Asia, I’ve noticed fewer tourists than usual, and my ever-weakening US dollars don’t go as far as they used to here in Bangkok, where I make my second home.

Here in Thailand, Macau is a very popular weekend destination. Airfare is cheap, and I’ve booked round-trip tickets for my wife and myself to Macau next week, for only US$135 each. Of course, Thais aren’t the only ones that love to go to Macau, but it’s nonetheless a great getaway for a little gambling, shopping and sightseeing. There are closer gambling destinations, but at least the border casinos that I’ve seen pale in comparison to what’s available in Macau. Across the Thai border in Poipet, Cambodia, a rough-and-tumble little border town where a vendor at the bazaar once offered to sell me a bear’s gall bladder, visitors don’t have much to look at in the way of scenery. It’s a sad, poverty-stricken wasteland, where bands of homeless children roam the streets begging for scraps. The casino there is curiously out of place, and is visited mostly by Westerners and Thais crossing the border for a day of Blackjack and roulette. But part of the fun of a gambling weekend isn’t just the chance to win a million dollars — it’s looking at all the glitz and flash, seeing world-famous entertainers, enjoying extravagant meals at 5-star restaurants, and watching the world’s wealthy and wealthy wannabe’s strolling down the elegant boulevards. There are none of those things in Poipet, and the casino there poses no serious threat to Macau’s tourist industry. Macau remains the crown jewel in Asia’s gambling scene.

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But — last month, Thailand’s new Prime Minister, Samak Sundaravej, suggested that Thailand legalize gambling. There has been no actual legislation passed at present and it’s by no means a sure thing. The idea has been bounced around for years, and it’s nothing more than just an idea in Khun Samak’s head — but in making this suggestion publicly, the Prime Minister has already set the wheels in motion. After such a suggestion, building a casino in Thailand is no doubt already on the “to do” list of every casino owner in the world, and it wouldn’t surprise me if there were already a few back-room deals in place. Thailand is of course a prime tourist destination, and should the country legalize gambling, then Macau-based casino operators and investors would certainly have some serious competition to the South.