The former Portuguese colony of Macau has had a good run as one of the largest, and most profitable, casino gambling hubs in the world. But now, as all things must eventually do, growth prospects for Macau are slowing down as fewer opportunities present themselves.
As more and more investors look to Southeast Asia as an alternative to Macau-like opportunities in the gambling market, the area is already becoming saturated with casino operators. Trying to replicate prior successful investments in Macau is becoming harder and harder and already some investors are becoming disillusioned with the area.
So now what? Just 2000 miles away lies India and its 1.2 billion people. It is a largely untapped market that is begging for new investments in the gaming market. Global Market Advisors LLC (GMA), an economic research group, has predicted that in the Indian state of Maharashtra, the greater Mumbai gaming market will present fantastic opportunities for investors. Casino gambling and online gambling regulation is coming along and by 2021, it’s estimated that gaming revenue in the Mumbai area will be $1.1 billion annually and the majority of that revenue will come from the local gaming market.
Silver Heritage Limited is a regional gaming operator in Asia and is investing in India. Tim Shepherd, COO of Silver Heritage, believes that with its vibrant economy and huge population, India will be the next Macau. They have already started to establish a presence in India by building a 400 room resort and casino in Northern India, near the border of Nepal. According to Shepherd, “We think India is the biggest untapped market in gaming in Asia. So if you compare where we were 20 years ago in Macau, when there were only one or two casinos servicing Hong Kong people, we move then to where we are today, look at the capacity of this place, it is amazing. In India, we have the same sort of demographics, we have the same sort of GDP growth as Macau.”
The Macau market thrived, and became dependent upon junket operators who brought in wealthy gamblers from the mainland. After the Chinese government cracked down on widespread corruption in the gambling market, junket operators and their wealthy clients disappeared. As a result, gambling revenue in Macau has fallen for the last three years. Shepherd pointed out that Silver Heritage will not get caught in that trap and will instead focus on the mass-market. They will advertise as a luxury entertainment hub and leisure resort rather than as a gambling establishment. Shepherd went on to say, “So in India, there already is a junket model [that is] very similar [to Macau]. We are not heavily relying on junkets. So we are building out of a mass-market type product because I think in the past we’ve seen here, that if you put much reliance on junkets, perhaps is not such a good idea. And there’s a good tourist attraction in Nepal as a country. You have the Himalayas and Mt. Everest, as well, so we are co-promoting it alongside that.”
What’s not to like about a country with 1.2 billion people, many of whom love to play online rummy, and having only a few casinos to service the market?