Sky-high minimum bets under scrutiny

2014/10/28

From：Macau Business Daily

We read it a lot. Macau revenues are seven times bigger than Las Vegas. But where do we stand in terms of minimum bet? Industry-watcher CLSA says Macau’s entry fee is ‘astronomical’.

The amount of Macau’s minimum bets has reached a value that is 10 times greater than in Las Vegas or Australia, according to a report by CLSA. However, the good news for players is that the value is likely to remain stable for the foreseeable future.
‘Minimum bets have now reached an astronomical level (US$270), more than 10 times higher than those in Las Vegas and Australia’, the report says. ‘Trees do not grow to the sky and going forward it should be very difficult to increase minimum bet further’.
According to the CLSA document, while the minimum bet in Las Vegas and Australia is as much as US$20 (HK$155) in Macau it is US$270 (HK$2,094) which accounts for a difference of close to HK$2,000.
From the different markets studied by the Hong Kong-based brokerage, Singapore is the place where minimal bets are closer to Macau. However, the gap still accounts for US$220 (HK$1707) as the minimum bet value in the sovereign city state is US$50 (HK$388).
The increase in the minimum bet value has led to the exclusion in Macau of tables with a minimum of less than HK$500. According to the CLSA report, in May 2013, 10 percent of tables were permitting players to bet HK$500. But since April 2014 there are practically no tables permitting less than this figure.
Another major change has been the reduction in the number of tables accepting less than HK$1,000 at a very fast pace. In May 2013, some10 percent of tables accepted a minimum of less than HK$500 and around 57% a minimum of over HK$1,000. However, as at August this year only 13 percent of tables accepted a minimum bet of less than HK$1000. By contrast, some 85 percent of the tables in Macau casinos have a minimum bet value of more than HK$1,000.

Risking gamblers satisfaction

While this change can boost casinos revenues, the effects on the satisfaction of gamblers is negative. To increase the speed of gaming by raising the minimum bet means that customers are receiving less value for money.
‘Increase in win rate improves the efficiency of the gaming table but it affects the entertainment experience of the player, as it might be fun to lose US$1,000 in two to three hours, but it is definitely not enjoyable to lose your entire gaming budget in one hand of baccarat’, it wrote. In other words, customers are ‘not getting the same value for money they received in the past’, it is added.
CLSA also says that the recent trend in increasing the minimum bet value is part of the strategy of casinos to increase revenues. As the operators cannot increase the volume of players, given that the hotel occupancies are running very close to 100 percent, they have to focus on larger table yields.
‘Hence, most operators are focused on increasing the speed of play. The launch of new products like non-commission bacarat, fast-action baccarat or electronic table games are ways to improve the speed of game, which in turn increases the number of games that can be played in a fixed timeframe and subsequently the gaming revenue’, it said.
In fact, the brokerage says that some operators are going even further and adopting what seem to be counterproductive actions like reducing the number of positions per table to increase speed of play.

Copyright@Macau Business Daily