Who could ever have seen this coming? (Macau dept)
In an article last week that is now behind the WSJ's subscriber wall, two reporters whom I mercifully won't name say that US-based "gaming" companies like Las Vegas Sands and Wynn are starting to have problems in Macau. Heart of the story:
Even as the U.S. operators pour billions into the market, they are struggling to overcome an unforeseen obstacle: the growing power of local middlemen in determined where big-spending, so-called VIP players spend their money
"Unforeseen"? The few prescient geniuses who happened to anticipate this problem included, let's see.... every single person I interviewed about the Macau situation in the spring and summer of last year, for this article in the Atlantic. There is even an authoritative academic study of the phenomenon, here. "Stanley Ho’s four-decade monopoly on all casino business might seem the strangest part of Macau’s economic structure," my story said, referring to the local Mr. Big. "It was not: That distinction has belonged to the related system of VIP rooms, which has also been the foundation of Macau’s gambling economy—and which poses the greatest challenge to Macau’s ability to come into sync with international norms."
If the big U.S. companies really have been blindsided by the VIP phenomenon, maybe customers have a better chance in Vegas casinos than they thought. Maybe "the house" is not really that sharp.