The Las Vegas of the East

Gambling is a major industry that has only been fully explored by few countries. However, there are two pioneers of that industry that have been able to reap profits for the past decade consistently, including Las Vegas and Macau. Las Vegas is the better known gambling capital of the world, however, a small former Portuguese colony named Macau is gaining traction and in fact, outperforming Vegas by 10 fold. Although the two have very similar properties, casino games, entertainment and accommodation, Las Vegas seems to be unable to catch up to the profitability of Macau. There are certain elements that impact the overall profitability of casinos, such as minimum bet, specific table games, environment and the largest of them all, the customer.

The two cities are located in vastly different locations, one being in America and the other being in China. America’s gambling laws are less strict, meaning that it is legal to gamble in almost half of its states. On the other hand, it is illegal to gamble in China completely, meaning that customers who do want to gamble have to travel to Macau, the only city where gambling is legal in China. This brings up a very interesting demographic of visitors and travellers who visit the cities for the main intention of gambling. Statistically, Macau sees many more day to day customers, meaning that many people travel from China for short day trips. In comparison, Las Vegas sees more long-staying guests where patrons tend to stay for more than a night, usually up to 2 or 3 days. Therefore, people who stay for a shorter period tend to spend almost all their time inside casinos, in most cases even eating inside casinos, and spend little time with entertainment such as shows or exhibitions. In contrast, Las Vegas puts on a variety of free shows such as magic, water displays etc, and in a way “distracts” the customers from only gambling.

Another large difference between the two cities is that the way that gamblers are “forced” to bet. What is meant by that is the certain laws and rules that the individual casinos have implemented in order to turn more profit or to maintain control. In Las Vegas, it is easy to find a table for blackjack with a 5 or 10$ minimum, whilst in Macau the minimum bet for games such as Baccarat, a very popular Chinese table game is 200mop, which is around $25. With double the minimum bet, although gamblers who are playing just for fun could be discouraged from the high bet, casinos in Macau have done extensive research in order to find the median price that gamblers are willing to spend and have settled at $25. This means that Vegas appeals to more of a “mass market” compared to Macau. However, even with a mass market with low bets , Vegas has failed to catch up to Macau.

One of the reasons why Vegas has been doing comparatively badly to Macau is purely because of the build-up of the market. In Macau, almost 90% of gamblers are Chinese, meaning that the language that is spoken within the casinos is Chinese. Since the casinos in Macau have less of a diversified customer base, they have the opportunity to appeal more to their main market, the Chinese. Chinese customs and traditions make them superstitious, believing in things such  as dragons and lions as mythical and luck-bearing creatures. Casinos in Macau are plastered with ornaments and statues of them, as well as a setup which aligns with the Feng-Shui of the property. All this makes Chinese gamblers more comfortable with gambling, as they feel that luck is on their side. On the other hand, Vegas has a much more diversified customer base, with gamblers flying from all over the world. It is hard to impress such a wide variety of people, which means they cannot market towards a specific market, and instead market a specific style to a diverse customer base. They include themes such as an Italian city, Hollywood or Indian themes. Although this might appeal to some customers, they definitely do not appeal to 90% of the market.

In conclusion, Macau is making 10 times of the profit of Las Vegas, however only appeals mainly to Chinese gamblers. This is very risky and dangerous, as if China implements much stricter gambling restrictions, it could jeopardize the entire operation of Macau as it did a few years ago. At the same time, Las Vegas can’t really do much with the situation they have. They are unable to control who comes in and out of their casinos and cannot raise the minimum bet as much of their income relies on that. Gambling has had an overall downwards trend over the past few years, due to an overall global economy decline. Both cities need to find a way to overcome that in order to remain profitable for the years to come.

(No pictures yet, still looking for the most accurate demographics and images)