Since the 1960’s, places like Las Vegas in the US and Monaco in Europe have been the world’s leading gambling hubs, but now the epicenters of the gambling world are steadily shifting to another part of the world – Asia.
Even with vast political turmoil surrounding the subject, Asian countries are steadily embracing the vast gambling market. There is a very good reason why they should, too. More than half of the world’s population lives in Asia and many regional countries are becoming economic powerhouses, together providing a much larger potential market than the US and Europe could ever conceive of.
While gambling is not well perceived by most Asian governments (and there are no cases where poker is perceived differently from any other form of gambling), there is a strong driving force that sustains it – the people. Even in countries where gambling is illegal, people love to gamble although poker is rarely their first choice of games because many countries have a variety of popular regional games as well as standard favorites like Blackjack, Roulette, etc.
Thanks to this widespread love of gambling, the region is slowly moving in the direction of legalizing gambling. Slowly, country after country is realizing that keeping a huge industry in the shadows of the black market is in no way helping their economy and that legalization in one form or another is the only way for them to benefit.
Some governments are trying to solve the problem by legalizing gambling while confining it to remote, hard to reach places, which hardly solves the initial problem as illegal gambling still flourishes across the rest of the country. Examples of countries adopting this approach include Malaysia, which has just one government run casino and only allows non-Muslims to gamble, and Vietnam which authorized casinos to be built in a remote village. Unfortunately, the village doesn’t even have modern roads connecting it to the rest of the country so the casinos are usually all but empty.
There are, however, other countries, that are already becoming or have the potential to become huge regional players although all of them still face challenges, some of which might take decades of work to overcome. Let’s take a look at five countries in the midst of the regional gambling boom and the differences between them.
In recent years, Macau has become the biggest gambling hub not only in the region, but also in the world, beating Las Vegas’ profits five-fold in 2013. With the Asian gambling market growing at the fastest pace in the world, Macau accounts for a huge chunk of that growth and by far out shadows its regional competition.
China has made considerable efforts to keep gambling confined to Macau and out of the Mainland where gambling is still punishable by death. Macau, however, relies heavily on Mainland gamblers who go there and has expanded major transportation hubs because it could not deal with the flow of people to Macau.
This has had a major economic impact on the region which is now expanding to cater to other tourist needs, fueling even more growth. It’s not hard to imagine that sooner or later, Mainland China will notice the potential benefits of regulated gambling in other state regions, however, that still might be some time away since things don’t usually jump from the death penalty to legal ends of the scale.
The Philippines is another regional player that has, to an extent, recognized the benefits that can be had from regulated gambling. Four casino resorts are currently being built in Manila Bay as part of the Entertainment City gaming and leisure complex.
While 2013 saw a profit of $2.2 billion (three times smaller than Las Vegas’ profits), the Philippines still missed its annual revenue goal of $2.5 billion mostly due to a tense political situation between the Philippines and China. A lot of the Manila Bay resorts’ success is riding on tourists and high rollers from China who, up to this time, only had Manila as a gambling option. Unfortunately, the politics have somewhat gotten in the way and the number of tourists visiting the Philippines from China has decreased as a result.
Despite this, the Philippines is currently the third largest regional gambling hub worldwide and hopes to surpass Las Vegas’ profits within six years despite being a long way away from rivaling Macau in terms of profits.
Another example of a country that recognized the potential of creating a regional gambling hub is Singapore. However, in this case, things went wrong soon after the exceptional debut of the newly opened casino resorts.
Singapore could have easily become a top-notch regional competitor which rivaled Macau’s dominance. Local casinos offer the largest maximum wagers in the world – up to $800,000 – which has proven popular with Chinese high rollers.
However, while Singapore still enjoys the title of the second largest regional gambling hub, also tying Las Vegas for the second largest gambling hub in the world in terms of profits, recent years have seen Singapore’s casinos in a recession. The main reasons for this are the reluctance of the government to allow further expansion and strict gambling rules.
Despite the troubles facing Singapore, it still is a formidable regional player in the market. If the country’s government decides to ease regulations at any time, all the other pieces are in place for growth to continue.
Currently, India does not register on the regional gambling hub scale as gambling as a whole is in its infancy there. However, with the world’s largest population, it is worth noting that India probably has the biggest potential in the region for growth in this industry during the next few decades.
Currently, there are a lot of factors holding back Indian gambling developments. Perhaps the most substantial one is the fact that the Indian economy is nowhere near as strong as the Chinese economy and that alone will prevent any sort of gambling boom for some time. That, however, is a temporary problem since the Indian economy is growing at a steady rate with no signs of slowing down.
The other major problems are the same as in Singapore: gambling is limited by the government and only two areas are allowed to open casinos. Despite this, many high-level Indian officials came out in favor of legalizing more forms of gambling like sports betting which is a very positive sign for the future.
To top it off, India has almost a dozen casinos already operating in the GOA resort, however, the gambling industry there is still in its infancy and the resort itself is not a viable competitor to other major regional resorts or gambling hubs. There is definitely huge potential for development which is what the next decade will have to bring to GOA for India to emerge as a formidable player on the regional market.
Finally, the best example of a country wasting its potential is Indonesia. With a population of almost 250 million people, steady economic growth and a formidable Gross Domestic Product, Indonesian islands such as Bali and Jakarta make for great tourist destinations. Because of that, the country could also become a very well-positioned regional gambling hub if it wasn’t for the total crackdown on gambling by the government.
With strict Islamic Law in place in Indonesia, the government has been pouring massive resources into banning all forms of gambling, both traditional establishments and online casinos and poker rooms, since 2012. A government-licensed lottery is the only form of legal gambling available in the country, and now, even it is coming under scrutiny by the government.
With no signs that anything will change in the foreseeable future, Indonesia may miss its chance to become a regional gambling hub completely.
Poker has not been overlooked and in the last 10 years, has become a large part of Asian gambling hubs. The first major regional poker tour in Asia, the APPT, was founded by PokerStars in 2007 and is now heading into its 8th Season. Tournaments included in this tour are held all across Asia and the Pacific in locations that include Macau, Beijing, Seoul, Australia, Cebu and Queenstown. This year, the Main Event, held in Macau, has a buy-in of HKD $100,000 which is roughly $13,000 US dollars. To put that into perspective, the buy-in of the first-ever APPT Main Event was $2,500 so the buy-in and field size have been increasing steadily over the years.
Though smaller in size, the Asian Poker Tour has also been running events across Asia and the Pacific since 2008 and, as recently as 2012, the WSOP launched its new branch, the World Series of Poker Asia-Pacific (WSOP APAC) which is sure to attract a lot of attention in the coming years.
Despite the tournament circuit in Asia winding up with each passing year, it is not the main attraction that defines the future of this region. The main thing that captured the attention of poker players all over the world are the huge cash games running in Macau. In fact, they are currently the biggest cash games in the world with millions of dollar on the table every day.
These games have been going on for years now although they are still somewhat surrounded by secrecy. It is well-known, however, that a lot of western high-stakes pros play in them regularly, most notably, Tom Dwan, who is frequently seen playing in Macau’s big games. The blinds in these games vary from $4,000/$8,000 to $12,500/$25,000 depending on who’s playing and it has been rumored that pots of up to $14 million have played out at these tables.
The main drivers of these games are local and regional high rollers. It is not surprising that Macau became the top destination for these games considering that it is part of China, the fastest growing economy in the world. Wealthy Chinese individuals from the Mainland frequently visit Macau since gambling is banned in Mainland China and is still punishable by death.
One trait unites most of the Asian countries with regard to gambling is that wherever governments try to put restrictions in place to keep the gambling market at a certain level, the industry usually materializes in the form of underground gambling. This pattern has repeated itself all over the world and is not exclusive to gambling and, just like many times before, sooner or later there is only one outcome – the realization that there is no way to keep certain restrictions on gambling.
Thanks to the independent governing system that Macau enjoys, it had a head start on the region, paving the way for what is likely to become the future model for many areas in the region. Other countries are lagging behind for various reasons, however, there is still a lot of time to claim the regional market segments that remain vastly untapped. Whichever country makes the next move to embrace gambling as a powerful economic driving force is likely to come out as a big regional and, perhaps, global player in the gambling market.