Chinese high-rollers throw Las Vegas lifeline

[Prometheus Bound]

Chinese high-rollers throw Las Vegas lifeline
Neil Gough
Updated on Feb 27, 2010
What happens in Vegas may indeed stay in Vegas, but the fortunes of America's Sin City are becoming increasingly dependent on what happens in mainland China. The Las Vegas Strip finally showed signs of a turnaround late last year, snapping an unprecedented 22-month losing streak that saw casino revenues decline to their 2004 levels despite the addition of tens of thousands of new hotel rooms in the US gaming capital.

But a closer look at the numbers shows that the tentative recovery has so far been one-dimensional, and it appears to be coming from an unexpected source: China. High-rolling baccarat players flown in from the mainland, which is awash in cash, appear to have single-handedly driven the recent turnaround in Vegas.

Las Vegas Strip baccarat revenue - considered by analysts to be a proxy measure for high-stakes Chinese play - rose 26.5 per cent last year and 100 per cent in the fourth quarter. By contrast, revenue from Americans' beloved slot machines and all other casino games contracted 14.6 per cent last year and 11 per cent in the December quarter.

....."Baccarat gains are likely a function of inbound play from China, where high-rollers have enjoyed the benefit of material real estate and stock market gains in 2009," says Bill Lerner, a Las Vegas-based analyst at Union Gaming Group. He said several major high-end strip casinos were prompted to increase betting limits by 30 per cent, to US$300,000 per hand, during this month's Lunar New Year holiday.

....Earlier this month, holiday visitors driving down the Las Vegas Strip were greeted by streetside LED marquee signs in front of resorts that flashed Chinese language greetings for the Year of the Tiger.

....MGM, the largest private employer in Las Vegas and owner of 12 casino resorts in the city, had its "best year ever last year" in terms of business from international high-rollers, according to chairman and chief executive Jim Murren. "That was driven mostly by our customers in Asia," Murren told investors last week.....

But if Vegas appears to have been riding on the dragon's back out of its economic doldrums, it may be time to check that bet. Analysts are beginning to worry that Beijing's recent moves to sop up liquidity on the mainland could throw a wet blanket on the strip's baccarat boom. .....Twice in a month, the mainland's central bank has raised the ratio of cash to deposits that lenders must keep on reserve in an attempt to cool lending. Analysts are divided over when Beijing will begin hiking broader interest rates, but most expect increases to begin some time within the next nine months. There are growing concerns that there will be knock-on effects for the ability of Chinese VIP junket agents and the high-rollers they solicit to gain access to casino credit and repay gambling debts. Mainland VIP players often rely on credit to fuel overseas gambling sessions.

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[izquierdista]

1. A fool and his money....

Maybe that's the way we get all the money back from China for taking our factories -- swindle them out of it fair and square.

[SpiralHawk]

2. Suckahs

A new one born every minute

[TankLV]

3. SOMEBODY's got to pay our "taxes"!!!

Remember - we don't have any State Income Tax...

Keep Playing - and keep Paying!!!

and thanx from all of us!!!