After Macau authorities announced their intention for all gaming concessionaires to adopt radio frequency identification (RFID) tables, commonly known as smart gaming tables, a gaming insider believes that the measure will have a “net neutral” impact on Macau’s gaming revenue.
Speaking with AGB, IGamiX Managing Partner Ben Lee thinks that the benefits of smart gaming tables regarding the improvement in marketing efficiency “could be offset by potential players’ reticence on being tracked,” indicating that “most mass players would not care” about the implementation of RFID tables; however, “the ones who downgraded themselves from the VIP room to the premium mass might, as they did that to escape scrutiny.”
Generally speaking, Ben Lee considers it difficult to predict the impact of the proliferation of RFID gaming tables on gaming revenue.
Another gaming insider, who prefers not to be identified, told AGB that the implementation of RFID tables in Macau will have “few impacts” on the gaming industry, particularly concerning data collecting concerns. With RFID tables, every bet can be tracked back to the player, but he points out that “Macau probably has the most dense surveillance camera coverage than anywhere in mainland China.” Under these circumstances, Macau players will not care about being tracked on their bets, notes the insider.
Currently, all six gaming operators in Macau plan to install RFID tables in the coming months to improve marketing efficiency and productivity. As reported by AGB, Melco will have its first batch of tables installed in the premium mass gaming area by the end of this month, followed by Galaxy in 2Q24E and SJM – starting off at Grand Lisboa in 4Q24.
Investment bank Goldman Sachs said that the pace of adoption will also depend on the availability of smart chips and tables.
MGM China adopted RFID tables in 2016. The Macau gaming operator has been using the technology for analytics to better understand their players and to improve marketing efficiency.
RFID tables have been around since 2014 but more for security reasons. For example, they have been used to identify fraud or scams on table games.
Not necessarily positive
Lei Wai Nong, Macau’s Secretary for Economy and Finance, affirmed the government’s encouragement for Macau’s concessionaires to adopt RFID technology for calculating the betting turnover of foreign gaming customers.
In late 2022, the Macau government declared that concessionaires in Macau could qualify for a tax deduction of up to 5 percent on gross gaming revenues upon successful recruitment of foreign gamblers. Legislation has also been implemented to oversee this initiative.
Initially, concessionaires had set up exclusive gaming zones for foreigners to streamline the process of calculating betting turnover from international clientele. However, Bill Hornbuckle, CEO and President of MGM Resorts, disclosed that these zones had not resonated with the foreign customer base.
The Macau Secretary confirmed the government’s encouragement for concessionaires to implement RFID gaming on their casino floors. He mentioned the installation of relevant equipment to facilitate the calculation of bets placed by foreign bettors and emphasized the government’s role in monitoring and approving the system.
Jennifer Song, an equity analyst with Morningstar, told AGB that MGM is the only one with fully optimized smart tables for now, which the company can track their potential premium clients; however, she notes that if the RFID tables are implemented in larger-sized casinos, the results may not be as positive as expected. She stated, “With larger data collected, more clients need to be tracked,” emphasizing the potential challenges.
The RFID tables are designed for analytics to better understand the players and to improve marketing efficiency. Morgan Stanley, in a previous investment memo, found that RFID tables could improve the speed of the game and thus the win rate.
‘The mass table win rate of MGM China improved by 500 basis points compared to 4Q23 and 2018. There are many reasons for that, but smart tables may have helped too, on top of the natural ramp of its Cotai property,’ noted the report.
The benefits of smart tables also include lower staff costs, with fewer pit managers and supervisors needed, as well as the availability of data on unrated gamblers.
