Warwick Bartlett: “Casinos will have to shrink until we have a clear path”

Warwick Bartlett, Chief Executive at GBGC, spoke to Focus Gaming News about the challenges in the gaming industry amid the Covid-19 pandemic and Macau’s proposed changes to the city’s gaming laws.

Exclusive interview.- Warwick Bartlett, Chief Executive at GBGC, talked with Focus Gaming News, and shared his views regarding the online business and the challenges the Covid-19 pandemic brought for the industry.

He then went into Macau’s gaming industry current situation and prospects for the future, regarding the revision of the city’s gaming laws.

While many countries are reopening their borders, Macau still seems to have some way to go. With two years of revenue wiped out, do you think that might have a shape on how Macau’s casinos look in the future?

The Beijing marathon has just been cancelled as the Delta variant is starting to spread. The indication is that the China policy is to lock down the moment the virus starts in a district or town. 

With such a high population transmission, we are all dependent on the vaccines to be rid of this scourge, and the key is the efficacy of those vaccines and the vaccination take up. 

The Chinese vaccine has an efficacy of 70 per cent about the same as Astra Zeneca which is fine if everyone gets vaccinated but there is vaccine reticence amongst a significant proportion of the population if you add reticence to efficacy the virus will continue to mutate and spread. 

This is a far cry from where we originally were. It was said to be a flu type virus and after the winter period, it would pass. That was nearly two years ago, and countries are still locking down!

“I can see Macau being in this present situation for some time to come. What should the casinos do? Much depends on the terms of the licence, what they can and cannot do.”

Warwick Bartlett, Chief Executive at GBGC.

Visitors to Macau in 2019 topped 39 million, a record. But in 2020 they are down to 5.9 million, and Macau’s GDP will probably fall by 30 per cent. 

The lockdown and then re-opening or stop-start is bad for business because you cannot plan, retain your employees, engage and train new employees, design and build new premises. There is no certainty in your business model.

Realistically the casinos will have to shrink to meet the demands of a falling number of customers. Close hotel floors, reduce the number of casino tables until we have a clear path that the virus is beaten.

There have been some signs that the pandemic has caused Macau to look at its reliance on gaming revenue. Do you think Covid-19 could influence gaming legislation and the casino retendering process?

Macau wants to be seen as more than just gambling, much like Las Vegas where MGM’s income is 70 per cent non-gaming. But until we are rid of Covid-19 it is difficult for managers to apply that thinking. 

Building super auditoriums, packing them with thousands of people who have travelled on a bus, plane or boat, is not a good idea for the time being.

Okay, developments such as these take years to plan and build, but what if after three years we are still on stop-start lockdowns? Creating huge buildings to remain empty is not good business. 

Las Vegas has become the party and MICE town because of its connectivity with the rest of the USA. People can travel freely to Vegas. Macau has the problem with viators requiring a visa and even so are there sufficient air routes from across China to take them there.

Operators have asked for clarification on certain aspects of the proposals Macau has made for new casino legislation. Do you think there are reasons for operators to be concerned about anything that’s being proposed?

Of course, for the reasons explained you want to know what is expected and when. The old adage ‘if you build it they will come’ no longer applies, they may want to come but may not be allowed to come. 

Internationally online gaming has perhaps stolen some terrain from land-based casinos, not least because of the pandemic. That’s not possible legally for Macau’s biggest markets, but do you think the rise of online gaming could also impact land-based gaming in East Asia?

Generally, people do not like to bet illegally, they prefer to gamble in regulated markets. But if regulated markets are not offered then they look to gamble with illegal operators and those operators will take business from regulated land-based operations. 

Having said that there is no shortage of people from China wanting to visit Macau, it is a resort destination with a good offer. The hotels and facilities are superb, Chinese people will find the trip a memorable experience.

As for how the US market is shaping up, will Las Vegas be concerned about the rapid expansion of online gaming outside of Nevada?

I don’t think so. To have a licence in the US you must partner with an operator who is already licensed, that operator will have a land-based business so the two combined will be complementary to each other, with opportunities to cross-sell, as we have seen in the UK market. 

“The online business in the US also has the potential to grow and promote the market because many of the US land-based operations are driven to locations.”

Warwick Bartlett, Chief Executive at GBGC.

Besides Las Vegas has become a party town with music festivals, exhibitions, conferences, great restaurants, and great hotels. It is not just about gambling. Even before the Covid-19 pandemic, Las Vegas gambling revenue had not surpassed the peak in 2007, after 14 years!

We are still working through the effects of Covid-19 not only from a health perspective. I learned today that three million Americans are to take early retirement, and that will have consequences for tax payments to governments, and people spend less when retired.

Prime Minister Boris Johnson said we have to live with this virus and people are happy the economy has opened up, however, the infection rate is climbing, and the medics are saying we should move to plan B.