Macau looks for mass-market reincarnation

Cheerier croupiers, cheaper handbags and breakfast with Shrek - these are just some of the tactics Macau's casino operators are turning to as they adjust to a sharp slowdown in the world's gambling capital.

Gaming revenue in the former Portuguese colony dropped more than a third in the first quarter of the year, accelerating a downturn that has ended Macau's decade-long boom with a thud.

Beijing's campaign to stamp out corruption and lavish spending by officials has caused a steep decline in revenue from VIP punters, Macau's main source of betting demand.

The six large casino operators have responded by trying to cut costs and find new revenue sources as they seek to limit the damage, while proving to Macau's government that they are serious about diversifying away from gambling.

Minimum bets at some casinos have been lowered from as much as HK$2,000 (US$260) at the height of the boom to as little as HK$300 now - though still higher than typical minimum bets in Las Vegas.

Simpler games such as sic bo, a Chinese dice game of chance, are becoming a more common sight near entrances and walkways on betting floors, with dice games deemed more friendly to first-time visitors.

The threshold for opening a VIP betting account at some casinos has also been cut from 200,000-300,000 patacas ($25,000-$37,000) last year to 100,000 patacas now.

Dealers have even been told to find novel ways to keep people at gaming tables for longer, especially since rules came into effect last year that force smokers into designated lounges.

"You have to be more competitive than your peers. Smile more and be nicer to players. You even have to entertain them, tell them jokes, rather than just distribute cards," said Ung Lim Ip, a pit supervisor at one of the big six casinos.

"There's not a huge amount they can do", said Aaron Fischer, gaming analyst at CLSA. "They're trying to be more aggressive with their marketing, especially to regular mass-market gamers."

Operators have mothballed some retail space within resorts, effectively walling off areas of empty shops as they wait for demand to pick up. Retail sales in Macau dropped almost 8 per cent in the last quarter of 2014.

Retailers themselves are rethinking their product mix, moving away from high-end luxury, such as Louis Vuitton, towards high-street labels, such as Tory Burch. When it comes to watches and jewellery, Cartier is out, Longines is in.

"Watches priced between 100,000 to 200,000 [patacas] were one of our bestsellers. Now they have been replaced by watches of 20,000 to 30,000 [patacas]," said the manager of a multi-brand luxury retailer.

Macau authorities want the gaming sector to diversify and are pushing the development of family-friendly leisure and entertainment facilities. Operators are at pains to burnish their non-gaming credentials, whether through art exhibitions, film studio tie-ups or celebrity endorsements.

Gordon Ramsay, the British chef, will open a restaurant in Sands China's Venetian resort later this year, while Oscar-winning director Martin Scorsese recently produced a short film to promote Studio City, Melco Crown's new project.

Live shows are also in vogue as the idea of Macau as a Las Vegas-style entertainment hub catches on. US pop star Katy Perry brings her world tour to The Venetian next month, followed in June by celebrity dog whisperer Cesar Milan.

Less conventionally, Sands Cotai is offering guests the chance to have breakfast with characters from DreamWorks films, including Shrek, Kung Fu Panda and the misbehaving penguins from Madagascar.

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