In this regular feature in IAG to celebrate 21 years covering the Asian gaming and leisure industry, we look back at our cover story from exactly 10 years ago, “Dr Allan Zeman talks Macau,” to rediscover what was making the news in June 2016!
Almost two years before he became chairman of Wynn Macau Ltd – a position he still holds today – Dr Allan Zeman sat down for a wide-ranging chat with Inside Asian Gaming for our June 2016 edition. And it quickly became clear why he has established such a successful business career in Hong Kong and beyond, branching into everything from construction and shipping to fashion and film.
With the interview coming at a time when China’s graft crackdown was in full swing and Macau’s gaming operators were reeling at their first real headwinds since liberalization, Dr Zeman was among the first to recognize the value of diversification and how a strategy that wraps up gaming with events and other attractions would become increasingly important.
This, he explained at the time, was because he didn’t see the crackdown as a short-term pain point but a broader policy shift by Beijing that would continue to impact the region for many years ahead.
“When President Xi Jinping came into power, he realized that social media was changing perceptions,” Dr Zeman said at the time, noting that the days were gone when wealth by corruption could be easily hidden.
“Once you start to see government leaders going out to cut a ribbon at some event and wearing a high-priced watch, on their salaries, people start to say, ‘Hey, where do these guys get the money?’
“Corruption was becoming rampant to the point where it was part of society, because the GDP of China was growing 13%, 14%, 15% and there was a lot of different kinds of money in the economy to make up that number.
“The government was clever enough to realize that they had to clean up or change the perception. Xi Jinping arrested Bo Xilai first and then Zhou Yongkang – they are a few great examples of leaders who in the past were untouchable. But it worked. People started saying, ‘Wow, this guy is serious.’
“Suddenly through those examples, all the corruption started to change, and a lot of that money that found its way to Macau suddenly dried up because no one wanted to be seen to be here spending money.”
Despite this, Dr Zeman also recognized that China’s crackdown represented a net positive – even for Macau – because it boosted investor confidence and provided a more stable base to rebuild. Macau, as he explained it, had already won the lottery but was now learning the lottery isn’t won with every single ticket.
“Now with the slowdown the market has normalized,” he said. “Macau has had to readjust to the new norm and the numbers are not what they were, but they are still very good. They are still better than Las Vegas. There are no businesses in the world that for this kind of investment make that kind of return. So, there is nothing wrong, you just got spoiled before, both with retail and with gaming, because there was easy money in the system.”
Macau’s concessionaires would, Dr Zeman added, finally have to perform “through service, events and different kinds of attractions to make Macau a better place. There are a large number of rooms coming on stream, so rather than everyone fighting each other, the strong will survive as in any business.”
