Other Countries Want a Piece of Macau’s Prosperity

It’s hard times here in the USA, and the recession (which the government has not admitted actually exists yet) is starting to creep into the rest of the world. But the Asian miracle is still going strong, and Macau is still the crown jewel in Asia’s economic engine.

But when you’re on top, everybody wants to be you, and such is the case with Macau. Recently, I wrote about online gaming in Macau, a venture that won’t take away from the region’s incredible casinos but will add to Macau’s attractiveness to investors. It would seem that the Philippines would like to get in on a piece of that action, and those that are putting money into Macau’s casino and gaming industry would do well to have eyes in the back of their heads.

First in the world of online gaming, IP-Converge, a Philippine subsidiary of IPVG Corporation, entered into a joint venture with First Cagayan Leisure and Resort Corporation to build a data center for hosting online gaming companies abroad. FCLRC will invest between US$3 and $5 million for a 60% stake in the business. According to reports in the trade press, the firm will host online gaming sites in other countries in the Asia-Pacific region, specifically targeting Macau.

Also in the Philippines, the ambitious “Tourism City” project of Philippine Amusement and Gaming Corp. (Pagcor) holds the ambitious, but probably unrealistic, goal of unseating Macau as the gambling center of the Far East. According to a report in The Manila Times, the company has no experience in the gaming business, but is rich in political connections. President Arroyo reportedly has said that the goal of Tourism City is to build a region that is comparable to, or greater than Macau in terms of gambling and entertainment. The government itself is unable to bankroll the project however, and Pagcor is looking for private investors. Surprisingly, none of the 4 companies that have expressed interest in investing in Tourism City are from Macau. Where’s Stan on this one?

Tourism City will be a long time coming, and I doubt they will come up with anything that will rival the flamboyant casinos and high-end shopping in Macau. The country and the participants don’t have a lot of experience in creating the class of casinos seen in Macau, the project is bogged down in bureaucracy and politics, and the money to bankroll it is not yet in place. Nonetheless, this is a project that should be watched, and a competitive threat that should be taken seriously.