Since Macao’s return to China, its economy has enjoyed strong growth, mainly due to its expanding tourism and gaming sectors. But a decline in casino revenue over the past six months has prompted many to examine what needs to be done to improve the industry’s odds. CCTV America’s Tang Bo reported this story from Macao, China.
Joseph Kelly discusses global gambling economies
Macao’s Gross Gaming Revenue numbers for November have offered little reason for optimism going into 2015, showing a 19.6 percent year-on-year decline to 24.3 billion Macau patacas or $3.03 billion. But Su Shuhui, excecutive director of one of Macao’s biggest casino companies, says there is no reason for panic.
“I think we have a high base last year, so it’s quite natural when Macao is trying to reorganize the gambling structure. Also, because of the slow economic growth in the world at large, so it’s not quite surprising for us. Among the whole, the total gambling revenue is more or less like that of last year, maybe with a little single digits of negative growth for the whole year,” Su said.
But Feng Jiachao, an associate professor at the University of Macao, said the industry could make changes.
“The gaming industry in Macao has been in a re-organizational period since June to re-evaluate its capital flow and gaming structure, due to some illegal economic behavior such as money laundering. The decline will continue as this re-evaluation goes on, but it’s healthy,” Feng said.
This re-evaluation is also important for Macao’s broader economy, as what’s profitable for casinos can sometimes be costly for regular residents.
“Theoretically, gaming consumption has no upper limit. It is calculated as part of the local gross domestic product, even though it makes little economic contribution to other local sectors,” Feng said. “But the legal commercial effects could make the situation worse. It has led to rising house prices and inflation, directly affecting local peoples’ lives. So the reorganization and reevaluation processes become very important.”
Feng also said that diversification could be an option to counter the inevitable effects of a single-structured economy, but that it will be a gradual process.
Macao gaming sees 20% decline; Atlantic City searches for sustainabilityince Macao’s return to China, its economy has enjoyed strong growth, mainly due to its expanding tourism and gaming sectors. But a decline in casino revenue over the past six months has prompted many to examine what needs to be done to improve the industry’s odds. CCTV America’s Tang Bo reported this story from Macao, China.
Atlantic City, New Jersey, was once the mecca of gambling on the U.S. east coast, but it has fallen on tough times. Four casinos have closed and a fifth, the Trump Taj Mahal, could be closed by the weekend. CCTV America’s Jim Spellman reported this story from Atlantic City.
Atlantic City searches for fix gaming decline as Taj Mahal considers closureAtlantic City, New Jersey, was once the mecca of gambling on the U.S. east coast, but it has fallen on tough times. Four casinos have closed and a fifth, the Trump Taj Mahal, could be closed by the weekend. CCTV America’s Jim Spellman reported this story from Atlantic City.
The $2.4 billion Revel, which opened its doors in 2012, is all closed now and the Trump Taj Mahal, is slated to close Saturday morning, unless a last-minute financing deal can be worked out.
The Taj Mahal opened to much fanfare in 1990. Owner Donald Trump dubbed it the “8th Wonder of the World” and brought Michael Jackson along for the grand opening.
But times have changed in Atlantic City.
When gaming was first introduced to the city in the late 1970s, it was just about the only place in the U.S. to gamble west of Las Vegas, nearly 2,t00 miles away.
But in recent years competition has exploded, as new casinos have opened in surrounding states.
“A big part of it is just people being able to gamble a lot closer, and if you are offering the same exact thing, why would you want to drive and pay tolls and buy gas and pay to park when you get there, when you can do it much closer to home?” Director of the Center for Gaming Research at the University of Nevada Las Vegas David Schwartz said.
With casinos closing, thousands of jobs lost, and tax revenue down, Atlantic City is facing a very uncertain future.
Experts said the key is diversifying the economy beyond gaming. An outlet mall has had some success drawing shoppers and new retail is being built. Locals said the key to bringing back Atlantic City is revitalizing its boardwalk.
Business is slow at Fralingers, where the specialty is salt water taffy.
“People are getting desperate. They’re worried whether they are going to have a job,” Darlene Bloomer of Fralingers said.
Bloomer has lived in Atlantic City her whole life. She believes the city and the Boardwalk can come back, if the focus is on bringing families to the beach instead of just gamblers.
“You have a beautiful beach, a beautiful boardwalk, fix it up and the city will do nothing but go up simple as that. I’m optimistic. I’m not going anywhere ha ha I’m staying,” Bloomer said.
Local politicians are scrambling to come up with ways to re-open the shuttered casinos and stop more from closing.
For more on the global gambling industry, CCTV America interviewed Joseph Kelly, a professor of business law at SUNY College in Buffalo, New York.