TWO MAJOR EVENTS  have significant relevance to the Asia Pacific casino industry: Asian economic recession in 1997 and Macau's return to China in 1999

INTRODUCTION

Asia Pacific Rim has been one of the most attractive markets for Las Vegas as well as many Asian casinos. Despite moral, security, political, and religious barriers in legalizing and operating gambling facilities as a venue for recreation (Five rules, 1998; Ian, 1995; Lee & Kwon, 1997), Asia still holds great potentials for expansion of the gambling industry (McJimsey, 1996) due in part to people's inherent wagering nature in their blood (Vittachi, 1994).

The purpose of this study was to review the overall status of casino industry in Asia Pacific Rim countries; examine how two recent major events, Asian economic crisis and Macau's return to China, affected the casino industry; and provide insights on market opportunities in the Asia Pacific Rim. The region is categorized into five areas, based on geographic vicinity and similar patterns of customer base and business performance in the casino industry: China, including Hong Kong and Macau; Australia; Philippines and Malaysia; Vietnam and Cambodia; and South Korea. Table 1 presents a brief summary of the years of legalization and the number of casinos in selected Asia Pacific countries.
 

China, including Hong Kong and Macau
Since the communists took over in 1949, gambling has been legally prohibited in China because it is against the traditional doctrines of Communism.  Gaming,  however,  has  been a traditional Chinese hobby and pastime. While gambling has been outlawed, people's zest for gaming and the corresponding amount of bets have never been diminished because of the legal prohibition (Gu, 1994).

During the past few years, China has been one of the fastest growing economies in the world. Economic wealth and increased leisure time usually prompt people to seek more entertainment and pleasure activities. The more financially able people become, the more likely they will seek gaming as a leisure activity. Even the most pragmatic- and business-minded Communist country in the world, China, has allowed the operation of slot machine halls in limited locations (Gu, 1994). The approval of slot machines and lotteries in China shows that the government has realized the potential financial contribution of the gaming industry.

In Hong Kong, horseracing is the only type of legalized gambling (Selwitz, 1997). Like the Chinese, gambling has been a popular recreational activity for people in Hong Kong. The highest cash betting in horseracing, for example, does not occur at tracks in Britain, but in Hong Kong (Vittachi, 1994). For Hong Kong Chinese whose gambling aspiration cannot be fulfilled with horserace betting alone, they have patronized gambling destinations in its neighboring jurisdictions, such as Macau.

Macau has been the Mecca of the casino industry in Asia Pacific Rim, with 10 casinos as well as horse and greyhound racing (Pulsudski, 1999; Selwitz, 1997). All 10 casinos have been exclusively owned and operated by Stanley Ho's Sociedade de Truismo e Diversoes de Macau (STDM) since 1961. STDM also owns a significant stake in greyhound racing and operates the lottery in Macau (Leung, 1996). The casino business contributed more than one half of the Macau's GDP in 1997 (Gu & Heung, 1998). The percentage declined to approximately 40% in 1999; however, gambling and tourism still provided about 60% of the government revenue in 1999 (Bowman, 1999).

The majority of tourists visit Macau with a single purpose of gambling. Overdependency on its vicinity to major inbound traveler generators, such as Hong Kong, has been one of the weaknesses of Macau's casino industry. Most visitors to Macau were Hong Kong day-trippers, arriving by less-than-an- hour ferry ride, who partake in casino gambling activities (Selwitz, 1997). Visitors from East Asian and Southeast Asian countries, including Hong Kong, have accounted for 95% - 96% of the total inbound travelers between 1995 and 1999. Arrivals from China have continued to increase, especially with a significant growth rate of 83% from 1998 to 1999 (Macau Statistics and Census Department, 2000). Taiwanese and Japanese accounted for between 10% and 15% of the total traveler composition during the past five-year period.

Australia
Gambling is a part of most Australians' lifestyle. This is supported by the fact that Australia possesses 20% of the world's gaming machines, while its population remains at less than 1% of the world's population.  Eight out of 10 Australians engaged in some forms of gambling, and half of the gamblers played at least once a week in 1998 (Anonymous, 1999).  Also, in 1998, Australians spent AU$8 billion (US$1=AU$1.59) on gambling, which was twice as much as they did a decade ago. The Australian's average gambling wager per capita was twice as high as those in Europe and North America in 1998 (Anonymous, 1999).  Australian casinos attracted 30 million people in 1997, including international commission players, or "junket players," who made brief visits to Australia for the sole purpose of high-stake gambling (Double jeopardy, 1998).

The Australian casino industry, celebrated its 25th anniversary in 1998, is composed of 14 casinos located in Sydney, Gold Coast, Brisbane, Townsvllle, Perth, Cairns, Darwin, Alice Springs, Christmas Island, Adelaide, Canberra, Hobart, Launceston, and Melbourne (Double jeopardy,  1998). The popularity of gambling was at its peak when Australia's two biggest cities, Melbourne and Sydney, opened their first legalized casinos in 1992 and 1994, respectively. In addition to casinos, horseracing, lotteries, and gaming machines outside the casinos are also legally permitted in Australia (Anonymous, 1999; Surry, 1998).

Philippines and Malaysia
The gaming industry in the Philippines has become a major source of GDP and employment for the nation. The Philippine Amusement and Gaming Corporation  (PAGCOR),  a  government  entity, oversees  and  regulates  the  nation's  gaining industry. The organization currently operates 11 casinos throughout the Philippines. In addition to casinos, PAGCOR operates bingo at 10 Casino Filipino branches. In 1999, the first slot machine arcade opened in downtown Manila in an attempt to make gaming facilities more accessible to casual players and, at the same time, to attract new customers.

PAGCOR encourages hotels and resorts to enter the casino industry by offering incentive programs and finding. To ensure a steady flow of visitors, PAGCOR launched an aggressive international marketing campaign to attract Asian players. The highly promoted junket incentive programs and gaming holiday packages also resulted in a 13% increase in foreign players visiting the casinos in 1998. Junkets from Taiwan, Japan, Malaysia, Hong Kong, and even China bring in the most gamblers to Philippines' casinos (Gushin, 2000).

Economic benefits, such as a sizable amount of tax dollars and employment opportunities, are attractive enough for Malaysia's Muslim government to permit casino gambling, despite its conflict with the doctrines of the nation's official religion. The Malaysian government has authorized one casino, the largest in Southeast Asia, in Kuala Lumpur with the premise that Muslims should not be involved in any aspects of the casino operation or patronage. Genting Berhad, a multi-business corporation, owns and operates the casino, with 73% of its total revenues generated from the gambling operation in 1996 (Jayasankaren, 1996). The majority of players were from Thailand, Singapore, and Indonesia owing to their geographic proximity.

Vietnam and Cambodia
Vietnam's first casino opened in October 1994, when Stanly Ho, the Macau casino tycoon, selected Vietnam as one of the new target areas to relocate casino operations away from Macau ('an, 1995). Gambling is technically illegal in Vietnam, and foreigners are the only customers allowed to the casino at Do Son, a seaside resort 20 minutes from the northern port of Haiophong. This is the only casino in Vietnam, with a monopoly license held by Ho. Cambodia has several casinos, including Mega Resort floating casino, which is moored on the banks of the Tonle Sap River in Phnom Penh (Ian, 1995). In 1996, Cambodia casinos located near the Thai border earned an approximately AU$ 1 billion from Thai gamblers, whose law strictly bans gambling (Kelly, 1997).

Due to the lack of start-up resources and management experience, most of the casinos in these newly developing countries have been established and managed by foreign investments or joint ventures (Linterner, 1991).  Although the casino industry in these countries is in its infancy stage, the anticipated contribution to economic growth and tourism development is the underlying reason for legalizing casinos (Hing et al., 1998; Hsu, 1999).

South Korea
In South Korea, gambling has been traditionally perceived as an immoral activity due to the deep Confucian influence on the Korean people. Since 1967 when the first casino opened, Korean government has allowed casino gambling only for foreign visitors; Koreans are prohibited to enter casinos in their own country. The Korean casino industry generated revenues of approximately US$ 256 million in 1994 (Lee & Kwon, 1997). Currently, 13 casinos in international tourist hotels are in operation.

Since Korean government liberalized overseas travel in 1989, negative consequences of Korean tourists' gambling in other countries have been reported. Financial difficulties, involvement in loan sharks, and even suicides were just some of the problems. Despite strong opposition from the public, the government recently passed a special law designed to stimulate the economy of some of the abandoned mining areas in Kangwon province (Lee & Kwon, 1997). The law was to enable Koreans as well as foreigners to gamble in new casinos to be built by 1998. However, the implementation of the law and casino development plan have been in suspension because of continuing conflicts between the government and the locals, and the ensuing economic turmoil that drove the nation into depression in 1997.

TWO MAJOR EVENTS

Two monumental events occurred in the 1990s have significant relevance to the Asia Pacific casino industry: Asian economic recession in 1997 and Macau's return to China in 1999. The Asian economic crisis influenced not only the region's economies and businesses, but also, to a lesser extent, the world's economy. The casino industry, by nature, has deeply intertwined with people's disposable income, which allows them to seek gaming as one of the entertainment activities. Therefore,  the  region's  casino  industry was impacted by the economic collapse, to a varying degree for each country.

Macau's return to China also suggested several implications for the region's casino industry. Because few comprehensive data on the casino industry's performance are available, fluctuation of exchange rates, the number of tourist arrivals and departures, tourism receipts, and other travel related information were used to assess the impacts of the Asian economic downturn on the casino industry. By the same token, the impacts of China's takeover of Macau were assessed by citing Hong Kong tourism industry's performance based on the number of tourist arrivals, tourism receipts, and other   significant   economic   and   tourism opportunities or challenges faced by Hong Kong after its 1997 return to China. Another reason for using Hong Kong data as proxies for Macau is the assumption that these two previous European colonies  share  similarities in many aspects, including ancestry, culture, history, lifestyle, and written language.

Impacts of Asian Economic Crisis on the Tourism Industry
During the Asian economic recession, many countries' currencies were severely devaluated, although the value decline differed from country to country. Theoretically, the currency devaluation of a tourist generating country is likely to influence its outbound travel in a number of ways (Economist Intelligence Unit, 1975). For example, Japan, a major tourism generating country and whose currency was significantly devaluated during the recession, should show a sharp decrease in outbound tourism. On the other hand, the weakening exchange position of a tourist receiving country has been frequently interpreted as cheaper prices in the country, and hence, expecting greater foreign tourism demand (Economist Intelligence Unit, 1975; Gerakis, 1965; Leiper & Hing, 1998). As a major inbound destination, Korea was expected to receive more travelers due to its weakening currency, while its outbound tourism was to remain at a 'minimum" level. Therefore, the examination of currency exchange rates would help interpret a country's tourism performance.

When traveler departures of selected Asia Pacific countries  were  examined,  Japan's  outbound travelers, surprisingly, declined by only 6% between 1997 and 1998 (World Tourism Organization (WTO], 2000). It may be explained by the fact that even though  the  Japanese  Yen  was  depreciated, Japanese travelers took advantage of other Asian weakening currencies by visiting countries with worse economic conditions, such as Thailand and South Korea. On the other hand, South Korean departures plunged by 32.5% in 1998 due to the worsen  economic  condition  (WTO,  2000). Approximately 5% decline in Chinese departures in 1997 may be partially caused by the Chinese government's restriction in permits issued to the Mainland Chinese who wanted to travel to Hong Kong after the handover (Mok & Dewald, 1998).

The total number of tourist arrivals to selected countries in Asia Pacific Rim was also reviewed. Australia and Philippines showed a 3% decline in arrivals in 1998, but bounced back to the previous levels in 1999 (WTO, 2000). Hong Kong, Macau, and Malaysia, whose majority of inbound tourists composed of Asians, experienced shrinkage in tourist arrivals between 1997 and 1998, but recorded a growth in arrivals in 1999 (WTO, 2000). In sum, Australia, China, and South Korea recorded the highest numbers in traveler arrivals in 1999 during the past five years, while Macau, Hong Kong, and Philippines have almost recovered from the temporary decline in traveler arrivals.

Along with the number of traveler arrivals, tourism receipts is one of the economic indices in assessing a country's tourism performance. The most significant decline is observed in Malaysia in 1997, with a nearly 40% drop over the previous year, followed by Hong Kong's plunge by 35% between 1996 and 1998 (WTO, 2000). South Korea, aided by its depreciated currency value, collected the highest receipts in 1998, but did not continue the growth in 1999 as Korean Won regained some of its  strength.  Macau  and  Philippines  also experienced receipt losses by 11% and 15%, respectively, in 1998. But both countries showed a slight improvement in 1999 (WTO, 2000). In sum, except for China and South Korea, all countries reviewed recorded a decline in tourism receipts in 1998, the first year after the Asian economic outbreak.  However, all countries, except South Korea, began springing back from the recession in terms of tourism receipts in 1999.

Impacts of Asian Economic Crisis on the Casino Industry
The Asian economic crisis struck the region's casino industry (Eadington, 1999; Hing et al., 1998; Sinclair, 1998). Most of all, the Macau economy whose  mainstay  is  gaming  suffered  most significantly in the second half of the 1990s. STDM, the monopoly operation of 10 casinos in Macau, reported a net profit of US$ 231 million in 1998, down 50% from 1997, while revenues were down 18% to about US$ 2 billion (Giley, 1999). Also, gambling tax receipts of US$ 630 million in 1998 were down 15% from the previous year (The countdown, 1999).

Australian casinos were also swayed by the Asian financial turmoil. The number of high rolling Asian gamblers decreased,  and  so did the accompanying revenues (Anonymous, 1999). It was reported  that  Australian  casinos'  revenues generated from the Asia market declined by approximately 10% due to the region's recession (Double jeopardy, 1998). Alarmed by the turmoil's apprehensive  consequence,  Crown  Casino  in Melbourne, the biggest gambling destination in the Oceania, and its rival Star City in Sydney compete fiercely between themselves and with US casinos in Las Vegas to lure big gamblers from southern China, Hong Kong, and other Asian countries as the region recovers from the crisis (Australian casinos, 1999).  Star City, the only casino in New South Wales, has recently opened representative offices for its high-roller business in Thailand and Taiwan, adding to the offices it already has in Singapore and Hong Kong.  Other Australian casinos also offer cash rebates and commissions on amounts bet by big gamblers to attract a larger share of the lucrative international high-roller market (Intense fight, 1999).

Despite the crisis, however, gamblers still stream into Asia's casinos. Perhaps it is because gambling offers a way for people to temporarily forget about their troubles. In Philippines, for example, casino revenues of the first quarter of 1998 were down by only 0.3% compared with a year earlier, according to the state-owned Philippine Amusement and Gaining Corp. (Five rules, 1998). The 1997 net profit of Malaysia's biggest lottery operator grew by more than 25% over the preceding year (Anonymous, 1998). Although the Hong Kong stock market was way down in 1998, betting volume was actually up at the Jockey Club, the only legal gambling outlet in the territory. It appears that it is human nature to shun or weather a recession for the hope of winning big in gaming (Anonymous, 1998).

Impacts of Macau's Return to China on the Casino Industry
Macau's return to China in 1999 has suggested several important implications on the region's as well as Macau's casino industry. First, despite its antigambling central government, gaming will be allowed in Macau even after the change of sovereignty (Pulsudski, 1999). Chinese leaders are aware that the economy of the six-square-mile territory would collapse if casinos were banned. Second, the possibility of renewal of the STDM's monopoly license, which expires in 2001, remains unpredictable. Although it is anticipated that the casinos will not be closed down after the license expires, there is a growing support for introducing competition to Macau's casinos in the foreseeable future, which will end Stanley Ho's 40 years of monopoly.  However,  the  STDM's  market development strategy was already launched by opening casinos in its neighboring countries, such as Vietnam, North Korea, and Philippines, in the early 1990s.  Ho also applied for permission to operate on-line gambling in Macau (Giley, 1999).

Although the Chinese government may pose a threat to the current Macau's casinos, it also provides strong law enforcement to Macau, which will enable Macau's casinos to entice gamblers who once stayed away due to safety and security concerns.  Alarmed by Macau's rampant crime rates, the Chinese government dispatched a special military garrison to frighten organized crimes away and to serve as a disciplined example for the police. The unit has stayed in Macau to ensure the security and stability of the territory by its mere presence (People's casino, 1999).

The impacts of Hong Kong's return to China were used to predict Macau casinos' performance after the  political  transition.  Therefore,  tourism performance before and after the change of authority and other qualitative characteristics of Hong Kong were examined. Hong Kong has had many challenges before and after its 1997 return to China. First, the change of sovereignty created a negative image of Hong Kong because of the uncertainty of its future under a communist ruling.

Second, in 1998, the Chinese government issued fewer outbound tourism permits to Hong Kong in an effort to show China's determination of keeping Hong Kong as a Special Administrative Region (SAR) and to alleviate Hong Kong people's fear that Chinese will flock Hong Kong after the transition of sovereignty (Mok & Dewald, 1998). Because China has been one of the major traveler generating countries to Hong Kong, the temporary permit limit resulted in a decline in Hong Kong's inbound tourism. Third, Hong Kong was the first capitalistic colony returned to a communist country, therefore negative  reports  from  foreign  media  were widespread. Many reports underlined that China will govern Hong Kong with its restrictive and suppressive approaches. The travel and tourism industry was predicted to be so gloom and unpromising  that  prospective  travelers  were skeptical to purchasing travel packages to Hong Kong, which induced a drastic plummet in inbound tourism in 1998 (WTO, 2000).

Unlike Hong Kong, few troubles were expected from the return of Macau to China for several reasons. First, Macau and China began economic and political integration in 1996, three years prior to the actual transition, in an attempt to minimize any possible conflicts after the change of sovereignty. The optimistic outlook for a peaceful unification, for example, led Stanley Ho to open his 10th casino in September 1999 (Macau gambling, 1999). Second, the return of Macau to China did not receive as much publicity from the media as the handover of Hong Kong did. Many foreigners did not even realize the transition of sovereignty. Third, the Chinese government's ability to have a peaceful transition as demonstrated in 1997 with Hong Kong raised the public's confidence  and reduced anticipated uncertainty. The rebounding of Hong Kong tourist arrivals was a testimony to the public's restored confidence. In 1996, the year before the handover, a total of 11.7 million visitors arrived Hong Kong and  generated  HK$84.5  billion (US$1=HK$7.75) in tourism receipts, setting a record in Hong Kong's travel and tourism industry. This growth may be driven by people's psychological reasoning that traveling was safer when Hong Kong was still under the democratic system (Mok & Dewald, 1998). The tourist arrivals began to decline in 1997, with an 11% drop over the previous year. The decline continued by another 8% in 1998, the first year after the transfer of authority. However, the slump was curved in 1999, with an approximate growth rate of 12%. In spite of political climate change and the Asian economic crisis, overall inbound tourism in Hong Kong started to recover to its previous position in 1999 after two years of slump.

In comparison to Hong Kong, Macau shows a different pattern in traveler arrivals. Table 2 shows traveler arrivals to Macau by country of residence. The number of tourist arrivals was at its peak in 1996, with a 5% increase over the previous year. The growth did not continue in the following two years, with a 14% and a 1% decline, respectively. In 1999, however, the number of traveler arrivals started to increase by a 7%. Although the number of tourists from Hong Kong decreased during the past five years, they still comprised more than half of the total tourists to Macau. Chinese travelers to Macau increased by approximately three times from 1995 to 1999.
 

The future of Macau's gambling industry does not appear to be dismal as reported and anticipated. With an assumption of the continuity of favorable relationship with its central government, Macau will receive more Chinese gamblers who want to vent their gambling fever. While the central government ensures security and safety issues in Macau, the Macau casinos, in return, will contribute to the nation's economic and tourism development. However, if the central government decided to outlaw or phase out casinos in Macau, Macau tourists, mainly Chinese gamblers from Hong Kong, Taiwan, and the Mainland China, are likely to switch their visits to other gaming destinations in Asia Pacific Rim (Gu & Heung, 1998).

FUTURE OUTLOOK

Asia Pacific Rim's reputation as the fastest growing international travel destination has already been restored as its economy began to recover from the region's recession. The slow but continuing recovery has elicited positive forecasts on the region's tourism and gaming outlook. Based on the reviews of political, economic, and social aspects of the casino industry, along with the performance in the tourism sector, the future of the Asia Pacific casino industry has been projected. The outlook provided in the following section focuses on countries that are involved in the supply and demand of gambling activities in the Asia Pacific Rim.

China
China's tourism industry has undergone a tremendous growth over the past 10 years. According to the World Tourism Organization (2000), China ranked the fifth fastest growing travel destination in 1999 and is expected to be the world's most popular travel destination by 2020. China not only is one of the attractive travel destinations, but also has generated increasing outbound tourism in the past few years. When it comes to the gambling industry, however, little consensus exists on whether China will allow casino operations in its territory. According to Gu (1994), the issue of legalizing casinos in China should not be overlooked in that the gaming experiment in China had already started in 1993. However, despite the rosy prediction, the possibility of legalizing casinos in Mainland China is slim at this point. Although China will not be a direct beneficiary of the growing gaming industry in the region, it will be a primary gambler-producing country to its neighboring gaming destinations.

Macau
The Chinese government has promised that the capitalist system and lifestyle of Hong Kong and Macau will be kept for 50 years (Gu & Heung, 1998). Due to the promise and casinos' lucrative tax revenues to the central government, Macau's casinos are likely to remain intact. However, there is an unspoken suspicion that China may practice tough regulations and requirements so that casinos will be eventually phased out. Political pressure and tightened regulations on casinos are likely to divert once Macau-based serious gamblers to other gaming destinations in the region.

STDM's market development strategy of opening casinos in other Asian countries does not appear to be successful. The new casino in Pyongyang, capital of North Korea, has not attracted enough foreign gamblers due to its economic poverty and visa constraints. The Haiphong's casino in Vietnam has suffered  from  poor infrastructure,  especially transport links, which hampers tourists from accessing the area. The Philippine's new operation is limited to greyhound racing and bingo, which restricts its ability in generating enough revenues when competing with the other 11 full-scale casinos in the nation.

China's dual purposes of developing gaming projects, if any, are tourism development and solution to rampant illegal gambling (Gu, 1994). Macau's casinos may redefine themselves as a contributor to China's tourism aspiration. Because gambling activities are strictly prohibited on the Mainland, Macau could be designated as "the gambling territory" to keep gambling expenditures from draining into other Asian countries. Due to Macau's relatively isolated location, residents of Mainland China are not likely to be affected by potential social problems associated with casino development. For Macau to remain as a gaming destination, the economic contribution of Macau's casinos should be documented to persuade the Chinese government to endorse gambling as a legalized business. Stanley Ho may demonstrate the positive impacts of his casinos in Macau based on their performances in this special territory. Future benefits, such as Macau's gaming industry as an integral part of the Chinese economic development, should also be illustrated.

The current ferry services between Macau and Hong Kong have been criticized for an unreasonable high-ticket price due to the absence of competition. Given the fact that the majority of the visitors to Macau are from Hong Kong, competitive ferry services between Macau and Hong Kong should be allowed.

Australia
Australia has seen a sharp increase in new casinos in recent years, but the high airfares and difficult visa application process deterred a large influx of Asian gamblers from visiting the casinos. Therefore, the patronage to Australian casinos has mainly made by Asian high rollers. Australian government's efforts, such as relaxing tourist visa issuing process and allowing multiple entries, and the cooperation between airlines and casinos to offer discounted airfares, have been catalysts to the growth of the Asian market (Australian casinos, 1999). Although it has been said that the Australian casino industry has reached a saturation point, with business and financial  challenges  compounded  by  fierce competition in the region, the efforts to attract once Macau-based gamblers and people from countries recovering from the economic crisis are expected to continue (Hing et al., 1998; Jarrett, 1997).

The Australian casino industry has a strong competitor, Las Vegas, in that both are trying to allure Asian high rollers.  Therefore, Australian casinos have to emphasize their unique benefits, such as short traveling distance, reasonable airfares, relaxed entering process, and special services. Some casinos already started catering to Chinese players with Mandarin-speaking staff (Chow, 1997). They also entice Asian players by emphasizing security and safety issues, which have been a major concern for players visiting Macau casinos. Other tourism attractions, not available in Macau, have also been used to market Australia as a multi-purpose destination. In addition, proper target marketing should help casinos in different geographic areas maximize their potentials.  For example, casinos in Sydney, Melbourne, Brisbane, and the Gold Coasts are popular among players from Hong Kong, Taiwan, South Korea, and Japan, while their counterparts in Perth are mainly patronized by gamblers from Southern Asia, such as Malaysia, Indonesia, Thailand, and Singapore, due to their vicinity (Chow, 1997). Therefore, marketing efforts should be geared toward the appropriate geographic regions.

Vietnam
Because of the unprecedented economic growth and development in newly developing countries, such as Vietnam and Cambodia, in the past few years, these countries will be positioned as new traveling and gambling destinations if appropriate initial investments are launched. These countries' governments will welcome new casino enterprises and investment because of tax revenues and opportunities for tourism development, which will eventually contribute to the modernization of the nations.  However,  the  lack  of appropriate infrastructures may cause a delay in developing and expanding existing casinos, and pose challenges for those who consider initiating casino ventures in these countries. Therefore, interested enterprises and  investors  should  collaborate  with  the governments to cope with those barriers and to achieve fruitful outcomes. If properly supported, those casinos are expected to lure gamblers from its neighboring jurisdictions, where gambling is not permitted, by emphasizing geographic vicinity and cultural similarity.

Philippines
The casino industry in Philippines is thriving, and the Philippines has become one of the most desirable casino destinations in Asia.  Political stability, steady economic growth, ability to weather the recent Asian financial crisis, and an educated and reliable workforce have made Philippines an attractive gaming investment location (Gushin, 2000). The uniqueness behind  the  current prosperity of the gambling industry in Philippines is the government's aggressive support by establishing a government entity, PAGCOR,  whose responsibilities include overseeing all legalized gaming operations and regulating gaming-related activities. Along with incentive and benefit programs to  boost  casino  investment,  progressive modernization and upgrade of existing casinos are expected to entice more lucrative Asian players. New projects, such as construction of a new world-class casino at the marina complex in Manila and the transformation of old casinos into new tourist destinations, will make the future of the nation's gaming industry promising and rewarding, to an extent that the country is anticipated to be on its way to becoming the Las Vegas of the Orient.

CONCLUSION

For the last two decades until the economic crisis in 1997, Asia Pacific Rim recorded higher rates of annual increases in international tourist arrivals than any of the world's other five regions (WTO, 2000). From mid-1997 to 1998, there is no doubt that tourism in most parts of the Asia Pacific Rim suffered by a varying degree.  However, the tourism industry in all Asian countries began to rebound in 1999, with increases in tourist arrivals and expenditures, compared to 1998.

The region has served as a significant generator of gamblers for Asian as well as Las Vegas casinos. Gaming has always been popular in Asia. Even in China, Singapore, and Taiwan, where gambling is forbidden by law, it has been popular for many years. Opportunities have arisen for other casino destinations in the Asia Pacific Rim owing to China's takeover of Macau and Asia's rapidly recovering economy from the 1997 economic chaos. However, it is not necessary to exclude Macau from the future of the region's casino industry. Rather, the current market offerings provide healthy competition among the Asia Pacific casinos and, as a result, will enhance the service quality and player expedience. If the Chinese government continues to allow gambling in Macau, the market will receive an increasing number of Chinese gamblers from the Mainland and Hong Kong. Other Asia Pacific Rim casinos, with appropriate marketing strategies, should be able to attract other Asian players who used to visit Macau. Therefore, the return of Macau to China will change Macau players' composition and present opportunities for other casinos to attract those "displaced" gamblers.

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