Tapping global markets

Apr 25, 2006 2:31 AM

The Las Vegas Convention and Visitors Authority has committed to luring more tourists from overseas locations.

The reason is that the LVCVA expects the popularity of gaming on an international level to grow exponentially over the next few years.

They are not alone.

Christensen Capital Advisors (CCA), a New York City firm that provides industry analysis to gambling companies, predicts that global customers are ready to spend more on gaming.

"It will grow," said CCA founder Eugene Christensen. "There’s still a substantial unsatisfied demand, both in the U.S. and abroad, for gaming."

Steve Wynn is among the gaming visionaries who are betting on international gaming. He was awarded a Macau license, which he recently sold as a sub-concession to an Australian group for $900 million. And he will open his own Macau resort this September at a cost of $1.2 billion.

Other parts of the world are catching on. Singapore lifted a ban on gaming last April in a move to increase tourism and to compete with Macau and other parts of Asia.

In the United Kingdom, the Gambling Act of 2005 loosened gaming restrictions, eliminating the 24-hour waiting period that had previously been mandatory between registering to gamble and entering a casino.

"The leading trend in gaming right now is globalization," Christensen said. "The fact that gambling takes place pursuant to government licenses prevented the globalization trends that affect other industries, like the auto industry. But since the turn of the century, that has changed. Big American companies like MGM and Harrah’s are globalizing as fast as they can. These companies are becoming global enterprises."

Industry experts say the new casinos will cater to a broader range of clientele, from business travelers to families on vacation. They will help increase a country’s international visibility, attract foreign investment and cash in on the major tax revenues that casinos often pay their host countries.

But for all their far-flung locations, the new casinos will be based on the model that Wynn pioneered, experts predict.

"Thirty years ago, casinos were slightly unwholesome places," said Arthur Benedetti, an architect who helped design Wynn Las Vegas. "Steve Wynn was a trailblazer in creating a more sophisticated experience. He created hip environments."

Beneditti added that Wynn altered the notion that the casino should account for 90 percent of the revenue while rooms and restaurants were mostly loss leaders.

"What Steve did was say that 25 percent of the revenue would come from the room, 25 percent from food and beverage, 25 percent from entertainment and 25 percent from gaming," Beneditti said. "It’s now the formula for a successful casino; if it works in Vegas, it’s being exported elsewhere."