Casinos eye profits overseas

Las Vegas-style casinos are expanding overseas as major U.S. casino companies look to new foreign markets, particularly in Asia.

Industry executives and specialists expect foreign markets to provide important opportunities for big U.S. casino companies. American Gaming Association President Frank J. Fahrenkopf Jr. cited substantial potential in Asia, Eastern Europe, Britain and elsewhere.

“Macau at the moment is the hot spot of growth — of real growth, not potential growth, but real, hard-dollar, in-the-bank kind of growth,” said MGM-Mirage spokesman Alan Feldman, whose company is building a casino there.

Macau’s gambling revenue last year reached about $5.6 billion, compared with $6 billion on the Las Vegas Strip and $5 billion in Atlantic City, N.J.

The leader in Macau’s American-style casino development is Las Vegas Sands Corp., which built its first casino there in 2004. After an August expansion, the Sands Macau now is the world’s largest casino, with 740 tables.

Las Vegas Sands is developing an assortment of resorts and casinos on the “Cotai Strip,” three minutes from Macau’s airport. The strip is envisioned as a major tourist magnet and will include about 20 hotels, including major international chain hotels, all with casinos operated by Las Vegas Sands, Mr. Fahrenkopf said.

Las Vegas Sands President William P. Weidner said Macau is the biggest part of the international market because of the huge number of people within about five hours by plane with large amounts of disposable income.

In addition to Las Vegas Sands and MGM-Mirage, Wynn Resorts is interested in Macau and has opened a casino there.

The next hottest spot, Mr. Fahrenkopf said, is Singapore, where Las Vegas Sands has received the first of two licenses and is planning a casino. Other potential areas for expansion for U.S. casino companies include Japan, South Korea and Europe.

Although U.S. companies face “quite a bit of competition” in Europe, they face less in Asia, Mr. Fahrenkopf said, partly because the U.S. companies build larger establishments aimed at conventioneers and others looking for such attractions as high-end shopping, restaurants and golf.

Major U.S. casinos now rely on gambling for a smaller proportion of their revenue than they have in the past.

According to Mr. Fahrenkopf, 10 years ago, 65 to 70 percent of a casino company’s bottom line would have come from gambling, with the rest coming from rooms, food, beverage sales and the like.

Now, 45 percent of that total comes from gambling, with 55 percent coming from spas, restaurants, luxury stores, golf courses and other non-gambling sources, he said, while most of the European casinos are still in the old mode.

Although much of the U.S. casino companies’ attention is aimed at Asia, that is not universally the case.

Harrah’s Entertainment is planning a casino in Spain and one with a Slovenian partner in Slovenia, near Venice, Italy.

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