“Las Vegas model” can work in Japan: MGM

Bill Hornbuckle, president of MGM and also a director of MGM China Holdings Ltd, developer of the MGM Macau resort on the Macau peninsula, made his prediction for Japan at the recent Union Gaming Group conference in Tokyo. “What’s unique about Japan – unlike Macau or even Manila, where when you go there the vast majority of the revenues are driven by gaming – is that Japan sets itself up, particularly Tokyo and Osaka, because of the airport, entertainment and all of the things that could be done around it and with it – [so] that you could end up with a Las Vegas model,” he told Bloomberg News.

“You could end up with it [Japan] being one of the great gaming markets of the world, but through entertainment and most notably MICE [meetings, incentives, conventions and entertainment] and conventions, and bringing in folks from around the globe,” added Mr Hornbuckle.

Non-gaming revenue has exceeded gaming revenue at casinos on the Las Vegas Strip since 1999 according to data compiled by the University of Nevada, Las Vegas. The same hopes have previously been expressed for Macau, but it hasn’t happened so far.

Part of the reason may be structural, as no other casino operator has so far made the large bet on convention facilities in Macau that Las Vegas Sands Corp did when it opened The Venetian Macao and its massive CotaiExpo space in August 2007.

Currently in Macau, non-gaming revenues market wide still account for only about 10 percent of the casino concessionaires’ receipts according to estimates by Bloomberg News. That may change as the next generation of Cotai resorts opens. They do so against a background of central and city government curbs on gambling growth and the central government’s often-stated desire to see a diversification of Macau’s general economy and the creation of more non-gaming amenities in the tourism sector.

Sheldon Adelson, chairman and chief executive of LVS, said in an interview with Bloomberg News in 2011 commenting on criticism that the ‘Las Vegas model’ wasn’t applicable to Asia: “It’s working. They [competitors] just don’t want to acknowledge it. After all, if they acknowledged that what I’m doing is better than what they’re doing then they’re slapping their own face.”