China crackdown puts spotlight on political risk in Asia

Beijing’s crackdown on corruption amongst its senior officials, which is now extending to other sectors of society, has had a devastating impact on casino revenue in Macau. The China example serves to highlight some of the political risks casino investors need to assess when considering multi-billion dollar projects in promising, but unpredictable markets around Asia. Democracies are often fledgling and gambling legislation is either non-existent or under debate. “No one could have predicted these events in 2003 when the recent wave of casino development began,” said Andrew Klebanow, a partner with Global Market Advisors, referring to the impact of China’s anti-graft drive on Macau. Some of the most eagerly eyed markets at present include Taiwan, South Korea, Japan, Vietnam and Russia, which all present their own risks, along with the potential rewards. Japan is seen as one of the biggest prizes, though the ongoing delays in passing casino legislation has created risks for...

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