Abstract
The opening of Macao’s casino industry with new legislation passed by the government of the Macao Special Administrative Region (MSAR) in February 2002 has provided the opportunity for new foreign casino operators – Wynn Resorts (Macao) Limited, Las Vegas Sands, Galaxy Casino Company Limited (Hong Kong), MGM Mirage, Melco Crown, and potentially others – to launch casino operations in this territory. One of the strategic decisions that new participants in this market must make is the composition of table games and slot machine offerings, as well as the mix of gaming and non-gaming amenities, to be employed in their new casino properties. The evaluation of the characteristics of, and prospects for table games and slots in the emerging gaming market of Macao is also of considerable interest to the casino operations of SJM – a wholly-owned subsidiary of the previous casino monopoly STDM, and its sub-concessionaires.In comparison with casinos in North America and Europe, table games generate an exceptionally high proportion of casino gaming revenue in Macao. To conduct an objective study over this phenomenon, and to provide a reasonable forecast on future trends, this paper examines and discusses historical, social and economic factors that have driven the relative attraction for table games in Macao’s casinos. The paper also reviews the utilization of electronic gaming devices (slot machines) and their recent developments in Macao’s casinos. A comparison of the key determinants of the demand for table games and slots makes it clear that, at least in the near to intermediate future, the optimal strategy for Macao’s casino operators is to retain a high proportion of table games. This is in spite of the fact that the labor costs and floor space demands of table games are typically much higher than those of slots. Nonetheless, because of player preferences and betting patterns, the average net profit margin per square foot of allocated space from operating table games has so far remained considerably higher than that from slot machines.
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