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Australia's casinos betting big on Chinese gamblers
Peter Gotting reports on the push by casinos to attract the growing number of Chinese billionaires.

In the lingo of casinos, they're known as whales, high rollers who wage hundreds of thousands of dollars on a single bet.

Many are Chinese billionaires, who have helped to transform Macau and Singapore into some of the world's biggest gambling destinations. And other countries such as Australia want a slice of this overstuffed pie.

Peter Gotting reports.
Transcript
PETER GOTTING, REPORTER: These are not casino chips but plaques. They're much bigger because they're worth up to $1 million each. But that doesn't stop some high rollers risking it all on this baccarat table at Melbourne's Crown Casino.

(Footage of betting tables at Crown Casino)

We're on the 39th floor of Crown, where the world's biggest gamblers come to lay some of the world's biggest bets. These rooms are part of a $2 billion redevelopment to attract the most lucrative of customers.

GARY O'NEILL, CROWN SPOKESMAN: It's very much targeted, you know towards the higher end of the market. That is, the high roller market, the VIP, international market.

PETER GOTTING: And the overwhelming majority of these high rollers, up to 90 per cent by some estimates, are from one country: China.

GARY O'NEILL: All of the major players in VIP gaming in the world are targeting the China market. And you need to spend megadollars in this space to remain internationally competitive.

PETER GOTTING: The megadollars are being spent after the exponential growth of Macau into the world's biggest gambling destination. More than twice as much is spent in casinos here than in Las Vegas.

Some industry estimates say it's five times as much. And countries across Asia are getting in on the game.

DAVID WIADROWSKI, PARTNER, PWC: Eighty per cent of first-time travellers out of China, for example, head to a casino. And 90 per cent of Chinese travellers that go to the US go to Las Vegas.

PETER GOTTING: Before 2005 casinos weren't even allowed in Singapore. But the lure of the gambling dollar was so strong that the government changed the rules. Now Singapore has two of the world's most expensive gambling venues.

Marina Bay Sands features an infinity swimming pool that overlooks the Singapore skyline, as well as the world's largest atrium casino. Resorts World Sentosa even has its own theme park.

GARY O'NEILL: The penny has dropped around the world, that if you want to have that slice of that market, if you want to target that high roller market, you need these sorts of facilities.

PETER GOTTING: Now Australia is seeking to catch up. Sydney's casino, the Star, has just completed a $900 million refurbishment to add facilities for high rollers.

And the chief executive of Echo Entertainment Group, which owns the Star, says, the new focus is already paying dividends.

LARRY MULLIN, ECHO ENTERTAINMENT GROUP CEO: We're now 26 per cent of the market here in turnover in that VIP customer segment. And Australia is just about 5 per cent of the global market.

But it's a big market; you're talking just under $1 billion in revenue in Australia alone.

PETER GOTTING: The question is whether enough Chinese high rollers will fly all the way to Australia.

At Crown, revenue growth from the VIP market stalled last year because of the increased competition from Singapore. But that was before the company opened new hotel rooms and gambling facilities aimed at attracting the high rollers.

Crown chairman, James Packer, has assured investors that its new strategy to attract customers from China is paying off.

DAVID WIADROWSKI: I think only time will tell whether both Crown and Echo get a return on the investment they've currently made. So, you know, across the two of them I think they have invested or they're planning to invest over the next two to three years sort of $3 to $4 billion. Whether they get a return on that I think there is still some questions.

PETER GOTTING: PwC (PricewaterhouseCoopers) says the competition will get even fiercer with countries such as Thailand, Vietnam and South Korea considering new casino developments. There's even a push from some of Japan's politicians to allow casinos there for the first time.

But even if this happens, the casino owners say there's plenty of money to go around.

LARRY MULLIN: There is definitely increased competition. But the thing that nobody is talking about is there's also a lot of growth.

PETER GOTTING: It's a gamble but the payout could be huge.
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