MACAU (Reuters) - Dragons dance across slot machines, virtual horses gallop on giant screens to Chinese commentary and a baccarat game makes gamblers feel impossibly tall by peering down the cleavage of a computer-generated croupier.
Slot machine makers are trying almost anything to crack Macau's $15 billion gaming industry and get a foothold in Asia.
But for a market that seemed a one-way bet, the going is proving surprisingly tough.
Although Macau wants to draw the masses who will pour cash into slots for hours, casinos are ratcheting up a battle for high-rollers who love baccarat -- on real tables.
Machines, modified for the Chinese market, are giving way.
"Casino operators in some cases are moving slot machines from the floor," said Mark Yoseloff, chief executive of Shuffle Master Inc, which makes slots, card shufflers and readers.
"I don't now if it's a short-term or long-term issue," he said at a gaming machine fair in Macau this week. "If we were only in the slot machine business, I'd be concerned."
With a hotel and casino building boom underway since Macau ended a four-decade gaming monopoly six years ago, the territory zoomed past Las Vegas in terms of gaming revenue in 2006 and is forecast to rake in around $14.6 billion this year.
Slot machines account for just 4.6 percent of Macau's gaming revenues, compared to around 80 percent in Las Vegas, suggesting huge scope for growth. In addition, casinos typically keep 2.5 percent of what gamblers spend on tables, but 8 percent of the money poured into slot machines.
But the hordes of mainland Chinese gamblers crossing into the former-Portuguese enclave are addicted to baccarat, a simple card game where the winning hand totals closest to nine. And high-rollers, who gamble upward of $100,000 a visit, still account for three-quarters of casino income.
A move by the Crown Macau casino, owned by Melco PBL Entertainment, to ditch 350 slot machines to make room for tables raises doubts over forecasts that the number of slots in Macau will more than treble in three years to 35,000.
Once derided for its awkward location, Crown struck gold when it signed a deal last year with A-Max Holdings, a firm that deals with many gambling tour operators, known as junkets.
Its share of Macau's VIP market quadrupled to 25 percent within a couple of months and revenue nearly trebled between the last quarter of 2007 and the first three months of this year.
With junkets prowling gaming floors for new customers, other casinos are getting into similar deals, which include setting aside tables for high-roller groups.
At Las Vegas Sands' Venetian casino, a move to pay junkets less sent VIP revenues plunging 23 percent in the first quarter.
"There's a different mindset here. Tables are where the money is," said Matthew Ballesty, head of slots operations at the Crown Macau. "But it certainly can change on the toss of a coin."
Machine makers are hoping that completion of hotels, casinos, shops and entertainment venues on the Cotai Strip -- a planned "neon alley" on reclaimed land that fuses two islands -- will turn Macau into a Las Vegas-type mass market.
With perhaps $500 million of Macau contracts up for grabs, they argue that casinos should use slots to counter a squeeze on table margins by junkets and increased competition.
New casinos slated for countries such as Singapore, Vietnam, India and Cambodia could also prove a boon for slots makers.
Progress in Macau has been hard won so far. Slot revenue grew 74 percent in the first three months of 2008, against 60 percent growth in total gaming income.
"No doubt the market has become very competitive," said Ken Jolly, Asia Pacific general manager at Australian machine maker Aristocrat Leisure Ltd
"Casinos are all focused on increasing revenue from slots and putting the newest products on floors," he said. "The slot departments are working as hard as the table guys."
Having sold nearly 2,600 machines to the Venetian, Aristocrat has a 55 percent share of Macau's slot market, and Jolly expected that to climb as he tries to hatch deals with Melco's planned City of Dreams casino and other new hotel-casinos.
Kurt Quartier, Asia head for International Game Technology N> , which controls about a fifth of Macau's slot market, said a labor shortage would help sell more machines.
Some analysts estimate Macau will need 50,000 croupiers in the next couple of years, a tenth of the population, each making about $23,000 a year.
"Every croupier has to be Macanese, and there's only a certain amount to go around," Quartier said.
Macau is also trying hard to give Las Vegas-style entertainment to spawn a mass market clientele. The giant Venetian casino has held concerts by big name entertainers such as The Police and Beyonce Knowles, and last week unveiled a new $150 million Cirque du Soleil show.
But there are no guarantees the model will catch on.
"I told my staff I was going to a Beyonce concert," said Ballesty at the Crown casino. "They said 'who's Beyonce?."'
Editing by Lincoln Feast