Slot machine makers see big wins from Asia
Wed, Jun 09, 2010

By Sui-Lee Wee

MACAU, CHINA - With Macau posting a string of monthly record gambling revenues and Singapore recently opening two mega casino resorts, two of the world's leading slot machine makers are upbeat about the outlook from Asia's gambling markets.

Executives from International Game Technology (IGT) and Bally Technologies are extremely optimistic about demand in the region - home to China, the world's fastest-growing major economy - and said it would continue to grow.

Asia's revival comes as Macau, the world's fastest-growing and largest gambling market, reported record gambling revenues in May and coincides with the opening of two casino resorts owned by Las Vegas Sands and Genting Singapore's Resorts World in Singapore.

Macau casino revenue surged almost 95 percent in May to a record 17 billion patacas (US$2.1 billion), analysts said, citing Portuguese news agency Lusa.

That followed a 70 percent year-on-year jump in April, when revenue rose to a previous record 14.1 billion patacas (US$1.76 billion).

"The outlook for slot machines in Asia is very, very positive," Cath Burns, vice president for Bally Technologies' Asia-Pacific operations, told Reuters.

"Those record revenues are coming across the board whether they are slots or tables, so that shows the pent-up demand from people coming to play in Macau is there."

"Personally, I think we are underdone. I don't think there are enough slot machines for the demand."

Bally's rival IGT, the world's biggest slot machine maker, was equally upbeat about the outlook in Asia and is seeing "huge growth" from the region, even as it expects little or none in its core U.S. market, where casinos and gamblers are keeping a tight hold on their purse strings, Susan Macke, IGT's chief marketing officer, told Reuters in an interview.

"When Macau launched, the number of slot machines was going to be a question since baccarat's really one of the biggest games here," Macke said.

"But from 2005 to 2010, the growth in the number of slot machines in Macau was 420 percent."


In Singapore, each casino is limited to 2,500 slot machines, and only about half are installed, making the wealthy Southeast Asian city-state "certainly a very hot market," Macke said.

"We think the slot machine uptake in Singapore will be much closer to what it is in Las Vegas, growing much more rapidly,"she said.

But Macke, who was also bullish on South Korea and the Philippines, was less sanguine about the United States.

"Consumers are still cautious about how they spend on the entertainment budget, until they see sustained stability in the economy," Macke said.

"And until that time, operators won't be able to invest in capex for slot machines."

"For the rest of this year, we don't see significant growth,"she said.

"We do think there's some pent-up demand and there will be a bit of an uptick in sales before the end of the year."

The replacement rate for slot machines in the United States has dropped to 5 percent in 2009 from 10-12 percent in 2000, Macke said, adding that she does not see a recovery to the 10 percent level soon. --REUTERS

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