Slot-machine invasion - Thursday 12th of May 2005

Casinos are bringing in thousands of slot machines to Macau to boost earnings from an army of punters. CNAWestern slot-machine makers will need new strategies to win the jackpot in Macau, according to Scott Winzeler, Asia division managing director for International Game Technology.The Nevada-based IGT, a dominant supplier of slot machines in the United States, sent Winzeler to run the new Asia division.

He was previously in charge of Japanese and international markets operations.The division, which opened its headquarters in Macau this month, will get about 70 percent of its revenue from the SAR, predicted Winzeler. IGT now holds around 30 percent of Macau's rapidly expanding market. A year and a half ago, the city counted just over 800 slot machines. Today the Sands Macau casino alone has that many, and there are a total of about 2,900 machines in the city.About 650 new machines have started spinning this year with the opening of the Orbit slot hall in the Landmark Hotel and the Mocha Slot Club in the Hotel Taipa Square as well as the Golden Dragon Casino and the Pearl Room in the Sands.Mocha plans to open two to three more 140-machine parlors this year. But Winzeler expects the major casinos now under construction will deploy at least 1,000 machines each.

The City of Dreams project, unveiled this month by Hong Kong's Melco International Development and Australia's Publishing & Broadcasting, plans 3,000 machines. The Venetian Macau will have 5,000 slots, according to an investors' presentation made this month by parent Las Vegas Sands.Slot-machine revenue increased by 170 percent in Macau last year, but that simply matched the supply growth rate and reversed years of stagnant returns. More significantly, the share of total casino revenue coming from slots roughly doubled last year to 1.5 percent. Slot takings at the Sands are up to 7percent of casino revenue, analysts estimate. Winzeler sees slot machines' share in Macau rising to 10-20 percent as the new giant casinos open.Obscured in the statistics is the fact that much of the ``slot'' revenue actually comes from other electronic games. By Winzeler's estimate, Macau slot halls are devoting half their floor space to multiplayer games such as electronic versions of baccarat and three-card poker managed by virtual dealers.

Orbit operates a popular virtual horse-racing game in which up to 30 bettors can play. Winzeler speculates that the games find favor with novice bettors intimidated by the crowds, yelling and superstitious ritual that surrounds real table game play in Macau. They just want to get their feet wet, he said. He says the games may also be popular in Asia because they allow people to play together, unlike traditional slots.Neither IGT nor Australian rival Aristocrat Leisure, which is also setting up shop in Macau, produce multiplayer games, so Winzeler expects they may partner with smaller companies who do.

Though regulators have largely welcomed the new wave of gambling machine investment, he said approval of a couple innovations has been held up. In the United States, IGT offers a system that links together thousands of slot machines in different parts of the country to offer huge bonus jackpots; Macau currently just allows slot parlors to offer linked jackpots across one hall's machines. Regulators have also yet to allow Macau casinos to reward heavy slot players with extra games for using loyalty cards.

www.thestandard.com.hk

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