Tuesday, December 11, 2012

Sellers of dreams

Lawrence Ho, who with James Packer set up the City of Dreams casino complex in Macau, made some revealing comments recently.

"Chinese people are very superstitious and they believe, one, that they are luckier than the casino themselves and, two, they are probably luckier than the other casino patrons and that's why they can win."

Of course, the tendency to overrate one's own luck or ability is a universal human trait. But the Chinese cultural heritage is particularly rich in beliefs and customs relating to luck and fortune, and there is no doubt that Chinese people are often strongly drawn to gambling in general, and casino gambling in particular.

Many Chinese are suspicious of the stock market and the big investment banks, and Ho suggests they see the casino as a fairer option. In baccarat, for example, you have a 50-50 chance of winning.

Well, it's not quite as simple as that! But Ho and his fellow casino entrepreneurs are quite happy to exploit the naive ideas of the new Chinese middle class.

In fact, growth in the VIP or 'high roller' sector is flat, whereas the mass market for what casinos have to offer is currently growing at 30% per annum. The focus is now squarely on the new middle class rather than on professional gamblers or the super rich.

I wonder how the likes of Lawrence Ho and James Packer, respected and admired as they are, justify to themselves their exploitation of human weakness and irrationality. Are they hard and cynical Social Darwinists at heart? Or do they believe that they are providing a real service to the community?

I am reminded of a childhood friend whose family ran a corner store which made a significant proportion of its money from cigarettes, many of which were purchased by young people.

My friend's trite observation that it was a dream they were buying, 'not just a packet of fags,' was true enough, but not particularly convincing as a moral defense.

The way I see it is that we humans do all sorts of stupid and self-destructive things. The relatively good business person may exploit some of these activities but provides an honest (and legal) product and refrains from outright deception.

The real reprobate is the purveyor of contaminated goods, counterfeit medical drugs, that sort of thing.

Or am I setting the bar too low?