Stakes at top casinos have been rising for years and it’s nearly impossible to find a table with a minimum bet of less than $65.
But the runaway bets could become a problem, Fischer says. But foreign casinos owners must cater to Chinese preferences.
Casino stocks have taken a beating in recent months following a rare slide in casino revenue.
The mind-boggling stakes leave Macau’s international competitors in the dust.
1) Mountains of cash
The city of 600,000 is almost entirely dependent on gambling. Hotels are planning to increase capacity by 70% over the next few years.
Macau is the only place in China where gambling is legal, making it a dream destination for millions of Chinese tourists.
The average minimum bet at a non-VIP table is now at least $270, according to Aaron Fischer, the regional head of consumer and gaming research at CLSA. And that means baccarat instead of poker or blackjack.
With the VIP market saturated, much of the growth is likely to come from more modest players.
CNNMoney (Hong Kong) October 22, 2014: 9:47 PM ET
Analysts say the poor performance is due to Beijing’s campaign against corruption and lavish spending, a reduction in tourist visas and a crackdown on junket operators who recruit gamblers.
2) Gambling with Chinese characteristics
“Macau is merely scratching the surface now, with ample pent-up demand to be captured by new casinos opening from 2015 onwards,” Fischer said.
3) Macau has problems, too
Gambling in the former Portuguese outpost has been fueled by a relaxation of regulations and a Chinese populace eager to try their luck.
The city’s $45 billion casino industry is now roughly seven times bigger than Vegas, and eye-popping growth has attracted the biggest players, including Las Vegas Sands and Wynn Resorts.
“It might be fun to lose $1,000 in two to three hours, but it is definitely not enjoyable to lose your entire gaming budget in one hand of Baccarat,” he said.
Here are three things to know about Macau:
Gamblers in Macau are not messing around. When the industry thrives, tax revenue jumps and residents — most of whom are employed in the business — receive payouts from the government.
The boom started in earnest in 2002, when restrictions on foreign operators were lifted. At Galaxy Macau, it’s even higher: $320.. Some gamblers are burning through their stacks of cash too quickly.
There is still huge potential in the territory, however