Asia gaming market to overtake US in three years, survey finds

Asia's gaming market could overtake the US in as little as three years as the region's rich flock to glittering gambling hubs such as Macau, according to a newly-released survey.

While Macau has already leapfrogged Las Vegas in gaming revenue and posts record-breaking growth, Singapore and other Southeast Asian nations are now building up their gambling sectors to cash in on its exploding popularity.

The survey of industry experts was released in Macau where thousands of delegates are attending the three-day Global Gaming Expo Asia in the former Portuguese colony.

About two thirds of those polled said US casino revenue - including in Las Vegas as well as Atlantic City and Reno - would be eclipsed by Asia in three to five years.

Among the rest, some even saw the region becoming number one in a year while others said it could take a decade.

"The growth of the market in Asia has been incredible," Frank Fahrenkopf, head of the American Gaming Association, told a press briefing.

"The survey found that all the respondents expected Asia to overtake the US (in gaming revenues)," he said, adding the region had "unlimited" potential as a gambling hub.

The survey also said Macau would remain the region's dominant market, while some expected Japan to steal number two spot from Singapore even though the country is still debating whether to legalise casinos.

However, Mr Fahrenkopf said political instability in Japan could prove a problem, adding: "The legalisation of casino gambling doesn't go well with political instability."I think it will be some time yet (before Japan has casinos)."

In 2009, Macau alone took in $14.5 billion while the entire US market raked in $30.74 billion.

Despite dire predictions of a slowdown due to the global downturn gaming sales in May soared 95 per cent year-on-year to $2.10 billion, according to Hong Kong brokerage CLSA.

"We've been saying for eight months that things would slow down, but they haven't," said Aaron Fischer, a CLSA gaming analyst.

Mr Fischer said he expects Macau tourist arrivals to increase about 10 per cent annually with construction of several stalled casino-hotel developments being restarted.

Soaring revenues in the high-roller market are driving the gains, rather than an across-the-board surge on the gaming tables, he added.

Mr Fahrenkopf said the city's record-breaking revenues stood in sharp contrast to US destination venues such as Las Vegas and Atlantic City, which have felt the impact of the downturn.

Experts predicted Macau's "torrid growth would continue for some time".

However, he warned the rapid expansion could be hurt by a mainland visa clampdown as Beijing grows concerned the amount of money being spent there.

A proposed smoking ban in the city's gaming halls could also weigh on revenue, Fahrenkopf said, adding that such a move in the US saw an average 20 per cent decline in revenue in the first year.

Internet gambling - which is illegal in the US - was likely to emerge as a "significant part" of the global market, Mr Fahrenkopf said, but he did not think it would "diminish gaming in a place like Macau."

Other Asian countries have keyed in to Macau's success with Singapore opening its second casino in April as part of a bid to lure big spenders from across the region.

The $5.5 billion Marina Bay Sands was opened by US gaming giant Las Vegas Sands, already a big player in Macau, as part of the firm's bet on Asia.

Asians "see gaming as a form of entertainment" while Westerners would rather spend money on dining and going out with friends, Sands Chief Executive Sheldon Adelson said when Marina Bay opened its doors.

An expected growth in the number of Asian multi-millionaires and middle class following the region's sharp rebound from the economic slump should drive regional travel, including people playing at casinos, observers have said.

Outside Macau and Singapore, casinos are authorised in Australia, Cambodia, Japan, Malaysia and the Philippines among others, while more are underway.