What does a sick chicken in China have to do with the health of Nevada’s gaming industry?
Plenty if Murphy’s Law holds true.
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While the state’s gaming industry is making a slow comeback from the Great Recession it is by no means a complete recovery and very fragile. Indeed the single most important part of the recovery is not because of the return of American tourists to Sin city but because of Asian high rollers and their penchant for baccarat.
According to the most recent gaming figures baccarat play accounted for slightly over 25 percent of the states total January gaming win. Given the fact that well over half the profits generated by baccarat come from just six Las Vegas Strip casinos and fewer than 10,000 Asian high rollers it is understandable that any notion of some kind of disruption in flight traffic from Asia to Las Vegas is enough to cause casino execs, gaming commissioners and state and county assessors to reach for either anxiety meds, heart burn pills or both.
“It goes without saying the income generated by baccarat is very important,” said Michael Lawton chief analyst for the Nevada Gaming Control Board.
And since the great recession of 2007-09 it has grown even more so.
Not only did China and the so called little tigers of Vietnam, Laos, Taiwan and Singapore weather the world wide economic down turn better than the rest of the world, their economies have also rebounded much faster and so has the demand for baccarat.
But while the new source of revenue is welcomed in the Silver State it is still very fragile which is why any hint of a disruption to flights from Asia to the United States makes everyone very, very nervous.
According to analyst a short term bump would be significant turning a monthly report from a plus to a minus, a long term disruption could be disastrous to the Nevada Gaming Industry as Asian gamblers seek and find action closer to home and possibly deciding to stay there.
International travel was disrupted was due to the SARS out break of 2003. Flights from Singapore and other east Asian countries were curtailed and the World Health Organization placed a quarantine on Toronto, Canada a major world travel hub.
Phylogenetic analysis of these viruses indicated a high probability that SARS corona virus originated in bats and spread to humans either directly, or through animals held in Chinese markets. The bats did not show any visible signs of disease, but are the likely natural reservoirs of SARS-like corona viruses. In late 2006, scientists from the Chinese Center for Disease Control and Prevention of Hong Kong University and the Guangzhou Center for Disease Control and Prevention established a genetic link between the SARS appearing in civets and humans, bearing out claims that the disease had jumped across species.
While technically not a bird flu strain SARS spread is very similar to bird flu and its sources. Just five years ago in 2008 preliminary steps were take to contain the bird flu strain H5N1 and while quarantines were considered the were not implemented.
A major disruption in travel can also come in the opposite direction. In 2010 a Mexican origin Swine Flu outbreak that spread to the United States caused some non-U.S. airlines, mostly Asian, including Singapore Airlines, China Eastern Airlines, China Southern Airlines, Cathay Pacific and Mexicana Airlines, took measures such as stepping up cabin cleaning, installing state-of-the-art air filters and allowing in-flight staff to wear face masks.
Again quarantine was considered but not implemented.
In addition to travel interruptions caused by disease outbreaks, natural disasters like the volcano eruption in Iceland or Mt. Pinatubo in Indonesia could ground whole fleets of planes for weeks on end.
And of course as tensions on the Korean peninsula play out war whether cold or hot could also interrupt travel is also a distinct possibility.
Ten years ago when Nevada drew tourists from all over the world and North America threats to just one sector would be shrugged off. Then Las Vegas was booming and bursting at the seams if travel to Sin City was interrupted from one part of the world it would be made up for from another part.
Today however with so few Asian tourist responsible for so much of Nevada’s gaming profits no one is shrugging when a Chinese chicken dies of the flu.