Casino Business Prophecy: Hainan to Become the New Macau
by Bodog Casino | Oct 11 2011
The recent announcement by Caesars Entertainment Corporation that they will be building a 470 million dollar non-casino hotel and resort on the island of Hainan in southern China may seem surprising. With
casino gambling being their core business focus, one could reasonably ask why would they be looking to get into the stand alone hotel business. However when the news is combined with the fact that MGM Resorts International is also building a non-casino hotel and resort on the popular vacation island then the aim possibly becomes clearer.
No need to spend your hard earned money travelling to China when you can enjoy Bodog's state of the art online casino right now! Enjoy the best in online slots and table games like Caribbean Stud and Blackjack from the comfort of home. Currently the only gambling allowed in China is in the former Portuguese territory of Macau. Macau is home to not only Asian owned casinos but also American owned casinos such as the Sands Macau and the Wynn Macau. Both
Sheldon Adelson of the Las Vegas Sands group and
Steve Wynn of Wynn International have publicly declared that the future of their gambling businesses lies in Asia. With astonishing 50% year over year growth lately, it is understandable that the likes of Caesars and the MGM group would very much like a piece of the incredibly tasty plum sticky bun that is China gambling revenues.
There is however very significant barriers to getting a licence to build and operate a casino in Macau. Previous to the Portuguese returning Macau to the Chinese in 1999, there was essentially a casino monopoly in the territory with Hong Kong casino mega mogul Stanley Ho owning all or part of the 17 extant casinos. That changed however when the Chinese government took over the administration of Macau and granted six new casino licences by way of open tender. One each was awarded to Las Vegas Sands and Wynn International while a third went to Australian billionaire Kerry Packer.
Since then Wynn International has received a second licence to build another casino property in Macau but that seems to be the extent of permissions granted for the moment. So with Macau a seemingly closed door for other Las Vegas based casino groups trying to enter into the Chinese market, rolling the
dice on another location seems like a good backdoor route in. Enter Hainan which has been famous in Chinese culture for many centuries as it has the only West facing coastline in China. As such it became a desirable travel destination to watch the sun setting over the water. What better place to build a series of casino resorts than an idyllic vacation island?
At the present however both Caesars and the MGM group are describing their ventures as branding and loyalty building exercises. The goal is to make their brands known and attract Chinese to become patrons of their other properties which do have casinos. Therefore it might be just a supposition based on coincidence that the arrival of two North American casino corporations on Hainan's famed Longmu Bay would signal intent to lobby for casino licences at some point in the future. At the same time though it seems a bit of stretch that two highly competitive casino groups would play
craps with a combined billion dollars on a simple branding exercise.
Whether Hainan becomes the next officially sanctioned Macau or not remains to be seen and certainly no one is saying otherwise at the moment. It does however remind one of the Genting Group's 237 million dollar purchase of 13 acres of Miami waterfront. The Malaysian gambling syndicate claims to only be interested in building hotels and resorts on the site, while coincidentally the debate over green lighting expanded gambling in Florida heats up among lawmakers.
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