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March 2011 saw a devastating earthquake ravage Japan, shocking the world and leaving thousands missing, homeless – or dead. In the midst of a massive reconstruction effort, is now the time for the country to introduce casinos? Innovate Gaming asks the question
Las Vegas welcomed scores of Asian tourists to its casinos in January as the city lined the strip with Chinese New Year celebrations. Wagers on baccarat were unparalleled and highlights the impact the game and Asian patronage has in Sin City.
Casino revenue at baccarat tables has easily surpassed blackjack in Las Vegas and now represents almost 60 percent of MGM Grand’s yearly table games revenue. VIP rooms with unlimited stakes baccarat attract high rollers especially from Asia, with many tables starting at a minimum $10,000 per hand.
Macau, the world’s biggest gambling destination labelled the “Monte Carlo of the Orient” is built on the back of high stakes table play. The enclave’s 33 casinos generated $33.5 billion revenue in 2011, compared to $10.4 billion across all Nevada’s casinos.
The VIP sector reportedly accounts for more than 70 percent of gaming revenue in Macau. This is controlled by junket operators who bankroll high-end gamblers from mainland China to play table games in plush, secluded rooms in the back of top casinos.
Baccarat is the game of choice in Asia and accounts for approximately 88 percent of total Macau casino winnings, according to the Macau Gaming Inspection and Coordination Bureau (DICJ).
Asia’s economy shows great signs of strength during these harsh financial times and continues to benefit the gaming industry. Players have large disposable incomes allowing them to travel and wager on high stakes casino games.
Blackjack has long been the top performing game in Las Vegas, but casinos are now seeing a noticeable shift towards baccarat. Casinos are working hard to increase international visitation from Asia and offer year-round baccarat tournaments with large prize pools.
LV Sands, who operates 4 casino resorts in Asia and 3 in the US won $6.87 billion revenue from baccarat for the first 9 months of 2011, whilst Caesars Entertainment, the largest US casino operator but with no facilities in Asia, produced a smaller $6.66 billion across its 52 US casinos during the same period.
Baccarat is popular amongst high stakes players due to its glamour appeal and sheer simplicity. The game also moves at a relatively slow pace producing a lower house edge and giving players time to place larger bets and additional side bets.
Nevada currently has 258 baccarat tables across 24 casinos, which has almost doubled over the past 5 years. According to the Nevada Gaming Revenue Report, casinos statewide won $1.27 billion from baccarat last year, compared to $1.03 billion produced from Nevada’s 2,810 blackjack tables across 151 casinos.
Figures show total revenue generated from baccarat has been on an upward trend over the last 10 years in Nevada, as blackjack slowly declines.
With Asian tourists favouring the glitz and glamour of Las Vegas as the number one gaming destination in the US, blackjack remains popular throughout the rest of the country and amongst local players.
Atlantic City, which recently slipped into third position behind Pennsylvania in terms of casino revenue, has poor links to major airports and mainly draws customers native to the US. The city’s 11 casinos won $9.1 million from baccarat in 2011, compared to $335.2 million generated from blackjack.
Casinos do not need to replace the still profitable blackjack tables for baccarat. Instead, they should provide exclusive baccarat facilities with high stakes play to attract Asian players. With baccarat producing large, unpredictable swings in revenue from quarter to quarter, blackjack remains consistent and helps casino to balance the profit sheet.