This article first appeared in the Jan/Feb 2014 issue of World Gaming magazine.
Trade shows are incredibly important to any industry. The collective wisdom they create shapes the direction the industry heads in – and ultimately what that industry offers to its customers. The gaming industry is no different, and there’s currently a shake up going on with the new Macao Gaming Show (MGS) challenging the established trade show in Macau, Global Gaming Expo (G2E) Asia. Who will win in this battle of the shows?
Around 10 years ago the Macau gaming industry converted from a very Chinese-style monopoly to a liberalized multi-operator competitive environment with one Australian and three American casino companies joining the mix. At that moment, the genie really was let out of the bottle. It was the beginning of the Macau gaming industry embarking on an inevitable journey of invigoration and modernization that has led to the industry now having a legitimate claim as being the gold standard for casino gaming throughout the world.
Macau is remarkably lucky in that it now gets the best of two worlds. On the one hand, it is on the doorstep of the nation holding the world’s biggest gamblers, China. Given the people of China are getting richer by the month, this is a happy accident of geography that gives Macau an insurmountable edge over all other gaming markets on the planet. On the other hand, Macau has enjoyed western gaming operators bringing their expertise and knowledge to the marketplace and lifting the standards of Macau’s offerings to a level never seen before. Slowly but surely, the managers and leaders of Chinese gaming operations have learnt to discard their initial suspicion of the western ways and adopt many of the western systems and standards. Likewise, the visiting western casino managers have adapted their styles for the unique Chinese influence of the Macau gaming market. It has led to a wonderful hybrid product offering that best-of-two-worlds product I mentioned earlier.
Prior to the liberalization, there was no gaming trade show in Macau. But it didn’t take too long before Macau caught the attention of the world’s premier gaming show, Global Gaming Expo (almost universally referred to as G2E). An annual G2E gaming show had been running in Las Vegas since 2001, and it was decided Macau needed its own version, G2E Asia. The first ever G2E Asia was held at Macau Tower in 2007, since construction of the Venetian Macao had not quite finished. G2E Asia then quickly moved to the Venetian and is now an annual fixture (in the second half of May) on the Macau Gaming calendar.
I’ve noticed a pattern with many of the ideas introduced to the Macau gaming industry by westerners. Generally, the initial reaction of Chinese operators is suspicion. Then over time they come to understand it and eventually, if it is an idea that translates well to the Chinese market, they embrace it and make it their own. This is not surprising – people of all races and from all places tend to fear what they do not understand. Change is not easy. But as a general rule, change is for the better.
This is not to say all ideas introduced by western operators are good. Some are not. For example, when Wynn Macau first opened it introduced the style of nightclub popular in Las Vegas and it was a dismal failure. The Chinese customer was simply not accustomed to this entertainment model. Similarly, many of Sands China’s initial offerings and operating styles were very American in nature and did not translate well to the Chinese market. But to their credit, over time Sands has learnt to adapt.
When G2E first came to Macau’s shores, local Chinese companies did not particularly embrace it. But as the years rolled by, slowly but surely the odd Chinese gaming manager would visit G2E and report back on what he had seen and learnt. It was only going to be a matter of time before a Chinese home-grown version appeared on the horizon. And it did.
The catalyst for the establishment of the Macao Gaming Show may well have been a controversial patent dispute between a Chinese electronic gaming equipment manufacturer and the organizers of G2E, the American Gaming Association (AGA). I do not propose to go into that dispute in this article, as it has been well documented (by WGM and others). In some ways it probably doesn’t matter what the catalyst was – at some point it was inevitable that someone would envision a gaming trade show run by a Chinese organization.
That visionary was Mr Jay Chun, Chairman of Paradise Entertainment, a company listed on the Hong Kong stock exchange. Paradise operates Kampek casino (across the road from Grand Lisboa) and also LT Game, the manufacturer of the approximately 3,000 hybrid live dealer electronic baccarat terminals spread throughout most of Macau’s larger casinos.
Jay Chun was the driving force behind the establishment of the Macau Gaming Equipment Manufacturers Association (MGEMA), which was established in mid 2012. Shortly after its establishment, the MGEMA, with Chun as its Chairman, announced that it would be organising the first ever Macao Gaming Show (MGS). While Chun was at great pains to emphasise that MGS was not a direct rival to G2E Asia, the industry as a whole certainly saw the two shows as competitors.
Many companies asked to exhibit at MGS were caught by surprise. They hadn’t received a great deal of notice and hadn’t budgeted for the expense. The show was untested and the organizing entity only established a few months earlier. So it was by no means certain that MGS would be a success and the jury was most certainly out. Most companies adopted a wait-and-see approach. Despite World Gaming’s good relationship with Reed Exhibitions, the event organizers who organize G2E on behalf of the AGA, World Gaming were firm advocates for MGS, as we always like to support local home grown entrepreneurship and innovation. All other things being equal, WGM’s default position is to always support the local company from Macau, Hong Kong or Mainland China.
WAS MGS A SUCCESS?
When the Macao Gaming Show was first announced, I clearly remember being asked my opinion on how I would measure whether the show was a “success” or not. The success or otherwise of trade shows is usually measured in terms of certain metrics such as the number of exhibitors, the number of visitors and/or the total exhibitor area sold. However, my answer involved none of these metrics. My answer was simply this, “It has to not be a disaster”. Given that this was the first ever MGS, as long as the show was not a disaster and there were some positive outcomes, I would be happy to define it as a success because it would mean there would be a second show that could build on the positive outcomes of the first. With the natural advantage of being a home grown product, more exhibitors would be drawn to future instalments of MGS. In fact, the second Macao Gaming Show has already been announced by the MGEMA and will take place from 18 to 20 November 2014.
It must be remembered that back in 2007, G2E only had 2,982 visitors and 79 exhibitors with a total floor area of 2,589 square meters. By 2013 those numbers had risen to 5,851 visitors, 139 exhibitors and a total floor area of 7,087 square meters. While it is certain much of that increase can be attributed to the enormous growth of the Macau gaming industry over the last six years, some of that growth would also be due to G2E becoming a more established show over the years and continuing to build upon an existing exhibitor base. MGS will undoubtedly experience the same phenomenon.
WHAT WORKED AND WHAT DIDN’T
As in any event, there were certain aspects of MGS that worked and certain aspects that need improvement. Considering this was the first ever MGS, there were a surprisingly large number of features that worked well. But there were also a few aspects that didn’t.
First, let’s take a look at what worked:
Call them junkets or VIP clubs or whatever you like, these organisations are still the lifeblood of Macau and will continue to be so for many years to come. Responsible for well over 50 percent of all gaming action in Macau, our casinos simply couldn’t survive without them. G2E has never really been able to engage with the junkets by having them exhibit or participate in their conference, but at MGS five of Macau’s premier junkets supported the show by exhibiting – some with very large stands. The five VIP clubs at the show were David Group, Golden Group, Heng Sheng Group, Jimei Group and Suncity Group. In my opinion whether the junkets actually did any business is not particularly important, the point is some key junkets supported the show. With the success of the 2013 show, expect to see more junkets represented in 2014.
When MGS was first announced the over/under line for the number of exhibitors must have been under 100. The final number of exhibitors was 102, and to crack 100 exhibitors in the first show has to go down as a great result. Expect quite a few more in 2014. The total show area claimed by the organizers was 7,887 square meters, but to be honest that included a lot of empty space between and around exhibitor booths. It was clear the organizers were trying to maximise the floor area metric. Nevertheless the show had the critical mass it needed, especially given its inaugural status.
MGS commissioned World Gaming to create MGSTV, a TV channel for MGS. The channel was put together with no sponsorship so it was made on a shoestring, yet managed to produce 31 segments including interviews with industry leaders, vox pops from around the show, coverage of the opening ceremony, the Macao Gaming Show Cup party at the Macau Jockey Club and the Macao Gaming Show Grand Prix party as well as some of the Macao Gaming Summit seminar. To view the videos visit www.MacaoGamingShow.com and click on the MGSTV logo in the top right corner, or visit YouTube and search “MGS Desk”. MGSTV gave many exhibitors and conference speakers a video resource they can use indefinitely into the future. MGSTV will return at the 2014 MGS and a sponsorship package provides an opportunity for a sponsor or sponsors to be featured on every video and for MGSTV to expand its scope and heighten its production quality.
Macao Gaming Summit
In addition to the exhibition, MGS included a three-day conference, the Macao Gaming Summit. The first two days featured 24 speakers from 11 countries and included six product presentations as well as a number of individual presentations and panels covering local Asian markets. The third day was essentially a fun day for those new to Macau and included visits to the Macau Grand Prix museum, the Macau wine museum as well as an invitation to the Macao Gaming Show Grand Prix party held at Golden Bar at Kampek casino. The summit was definitely a success but given it was the first ever Macao Gaming Summit, awareness and therefore attendance was quite low. This will no doubt be built upon in 2014.
Macao Gaming Show Cup at the Macau Jockey Club
One of the innovations of MGS was holding a race meeting at the Macau Jockey Club completely dedicated to MGS. This was a fun night for all and provided a refreshing change from the usual networking events at trade shows. The race meeting gave partygoers a chance to have a flutter while providing the Macau Jockey Club an opportunity to showcase itself to a wide audience.
Slot Experience Center
The Slot Experience Center was a separate room in which invited VIPs and other guests could test drive the latest in slots and provide feedback in the form of voting on the machines in different categories. Winning slots were awarded prizes that were presented at the Macao Gaming Show Cup evening at the Macau Jockey Club. For more on the Slot Experience Center, see our separate article on page 50.
Now let’s take a look at what didn’t work so well:
Lack of overseas buyers
MGS was marketed as a chance for Chinese and Asian companies to showcase their wares to a global audience. While there were a healthy number of Chinese and Asian exhibitors and visitors, the overseas audience was most definitely thin on the ground. This is something that needs to be improved for MGS 2014. Given it was the first MGS, perhaps organizers focussed primarily on ensuring exhibitor numbers and fell short of time in securing overseas visitors to the show. This should be less of a problem in 2014 now that the show has an existing exhibitor base to build upon.
In some ways, MGS had the opposite problem to G2E. Given G2E’s strong roots in the United States (it is organized by the American Gaming Association after all), that show has no problem in attracting gaming executives from the US and other western jurisdictions, but continues to find it more difficult to engage with Macau, Chinese and Asian companies. MGS has no such trouble, but will need to increase its efforts in 2014 to engage with casino companies from jurisdictions such as the United States, Europe and Australia.
A sometimes quiet show floor
There is no doubt there were certain times during the three days of the MGS exhibition that the show floor was very quiet indeed. This was not a good look and was probably the single biggest problem with the show. It wasn’t a complete ghost town and there were times where there was a steady flow of foot traffic, but the visitor numbers need to be built upon. MGS claimed 8,634 visitors during the three days but I find this number very high compared to what I saw, and I feel it must take into account multiple entries by visitors. I am sure the organizers of MGS are aware of this issue and will be keen to address it in 2014.
THIS TOWN AIN’T BIG ENOUGH FOR BOTH OF US
So is Macau big enough to handle two major gaming trade shows? Do we need or want two shows? In the blue corner we have the Champion G2E Asia, which will hold its 8th show from Tuesday 20 to Thursday 22 May 2014 at the Venetian Macao. In the red corner, the Challenger MGS, which will hold its 2nd show from Tuesday 18 to Thursday 20 November 2014, also at the Venetian Macao. So we’ll certainly be having two shows in 2014 – but what about 2015, 2016 and beyond?
In my opinion, while there are some significant differences between the shows, they are too similar to effectively co-exist. In the long run, one will stay and one will go. A third, less likely option is the two shows may conduct some kind of merger or joint venture. The shows may co-exist for a few years, but there will eventually be a consolidation to form one show encapsulating the best of both. It will be very interesting to see how this plays out but no matter what happens, as always, WGM will be here to commentate on it!
MARK THE DATES
|Macao Gaming Show (MGS)
|Tue 20 to Thu 22 May 2014
|Tue 18 to Thu 20 November 2014
|Cotai Expo at the Venetian Macao
|Cotai Expo at the Venetian Macao