Strategy
	Betting on Casinos
	By Michael Schuman

Posted Monday, January 31, 2005; 20:00 HKT
As a gambling Mecca, Macau has a comparative advantage that's hard to beat: it's just about the only game in town. Casinos are outlawed or heavily restricted throughout Asia, so no other city is vying to become the region's gambling capital. Malaysia boasts one of the more substantial operations, at Genting Highlands. Stalinist North Korea is home to casinos at a Pyongyang hotel and in the remote and bleak special economic zone of Rajin-Sonbong, but the country's isolation means few outsiders visit. South Korea's 13 casinos, all but one of which are closed to locals, don't fare much better: most of the foreigner-only establishments have been running at below 10% capacity. Macau's stiffest competition comes from Las Vegas, where wealthy Asians are among Sin City's biggest high rollers.

But the more successful Macau is, the less likely it will retain its advantage in Asia. Interest in government-sanctioned gambling operations is growing around the region as officials seek an additional economic boost and new sources of tax revenue. Inspired by the Macau boom, Hong Kong lawmakers in November floated a plan to build casinos on Lantau island, near a Disneyland theme park. Outspoken Tokyo Governor Shintaro Ishihara and other provincial leaders in Japan are calling for the creation of special zones for casinos in major Japanese cities. The Philippines is looking to open up its small casino industry to foreign investors. South Korea granted three new casino licenses in November. Even upright Singapore might ditch its ban on casinos. The government has floated the possibility of an integrated complex that comprises shops, hotels and a casino. Singapore is currently asking gaming giants to offer preliminary proposals. "If gambling is one of the things [tourists] want to do, then maybe we should allow them to do that in Singapore," new Prime Minister Lee Hsien Loong said soon after taking office in August.

But as is often the case when gambling is on the agenda, the initiatives face heavy resistance from groups with vested interests. In South Korea, struggling casino operators are fighting the government's expansion plan because it "will only make the slices of the pie even smaller," says Kwon Young Ki, spokesperson for the Korea Casino Association. Proposals for new gambling halls inevitably draw strong objections from religious leaders and the police, who believe they will lead to a rise in immorality and crime. Politicians in Singapore are toying with the idea of barring locals below a certain income level from gambling in the new casino, but that hasn't stopped strong public criticism of any change. Legalizing casinos, blasted one critic in a letter to the Straits Times, would "throw away our hard-earned virtues of thrift, diligence and honesty just for a quick fix." Perhaps Macau's biggest comparative advantage is that it threw away its virtue many years ago.

With reporting by Kim Yooseung/Seoul and Jake Lloyd-Smith/Singapore

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