Diversification with Macau characteristics

The Wynn Resorts quarterly earnings announcement released this week underlines a key difference between Las Vegas and Macau. It’s a difference that Macau casinos need to address, particularly because Beijing says so.

Net revenue for Wynn’s Las Vegas operations in the second quarter totaled $390.8 million. Casino net revenues were $158.3 million, meaning non-casino revenues – from rooms, food and beverage, retail and entertainment – represented $232.5 million, or 59 percent of total revenues.

(During the earnings conference call, Wynn Resorts founder Steve Wynn trashed President Obama. Wynn’s personal attack extended an emerging tradition for the billionaire mogul.)

In Macau, Wynn registered net revenue of $976.5 million. Gross non-gaming revenue totaled $94.6 million, or less than 10 percent of the total. That figure must rise, Chinese central government officials urge, and Macau’s government has made diversification a priority.

Don’t expect Macau to mimic the Las Vegas patterns for non-gaming revenue. Instead, look for diversification with Macau characteristics. What works in Vegas overwhelmingly hasn’t worked in Macau and may never succeed. My Asia Times article examines reasons behind those differences. Beijing will need patience to see significant changes in Macau’s non-gaming revenue percentage.

Totally globalized native New Yorker and former broadcast news producer Muhammad Cohen is author of Hong Kong On Air, a novel set in his adopted hometown during the 1997 handover about television news, love, betrayal, financial crisis, and cheap lingerie. See his biography, online archive and more at www.muhammadcohen.com.

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