Macau’s gambling industry is the envy of many, earning this region of China the nickname the “Monte Carlo of the Orient.” In 2006, Macau became the gambling capital of the world, with VIPs and high rollers making up two-thirds of their revenue. These high-stakes players from China are attracted to Macau’s riches by junket operators that whisk deep pocketed players to Macau via private jets and limousines and put them up in large suites in lavish hotels. A typical big spender needs to drop at least $1 million per trip to the region to maintain his or her VIP status, so it shouldn’t surprise anyone to learn that gambling is Macau’s largest source of revenue.
According to Bloomberg Businessweek, Macau’s gambling industry raked in $45 billion last year—more than seven times that of Las Vegas’ haul for 2013. Macau is home to 33 casinos, including the Venetian Macau, the largest casino in the world.
Where does the money come from?
This mind-boggling level of success doesn’t come cheaply, according to the Businessweek story. Last year, in Macau paid out $13 billion (29 percent of their total revenue for the year) to junket operators who are responsible for getting these high rollers to casino tables. Players are loyal to the junket operators who provide the comped stays, private jets, cars and around the clock concierge service. There are many companies to choose from–currently, there are about 200 licensed junket operators in Macau.
Although the model works successfully, casino operators in Macau are feeling the squeeze from the large sums the junket operators are owed each month. While some casino operators rely 100% on junkets to bring customers to them, others are working on diversifying by building high-end malls and producing shows to attract new customers or even building new facilities in other areas.
US Casinos and Junkets
Here in the US, casinos—especially smaller ones– do not have the budgets to hire junket operators for billions of dollars, regardless of how many private jets and limousines they own. In February, the Nevada Gaming Control Board reported that Nevada’s casinos took in $926 million for the month. In Las Vegas, gambling revenue checked in at $556 million, down 20% from the previous month. It’s clear that as much as we love Las Vegas, Macau is in a class all of its own.
Drive foot traffic in other ways
In the absence of luxurious private cars and junkets willing to fulfill every whim in return for gambling dollars and repeat business, casinos here in the US, especially smaller ones, still have a fighting chance. These smaller gaming facilities can stay competitive with the help of traffic counting technology. A traffic counting system can help highlight the excitement of a casino floor. Casino owners and managers that employ this technology can more accurately measure how many players are coming and going into any single area and measure the level of interest in the different gaming stations. If activity is too low, the management team can change the position of gaming tables or equipment and adjust the traffic flow.
The ability to change the floor and measure the different variables helps the casino plan effective promotions and evaluate marketing and promotional campaigns based on hard data. It also helps plan more effectively for scheduling needs. Casino operators will save money by not having too many employees on the floor at once and rest easy knowing they’ll have enough people to cover the busiest shifts.