High Rollers 8-23-2005

The battle of the gambling titans continues in Macau

By: Jim Calio

Recently, Stanley Ho, the longtime kingpin of gambling in the former Portuguese colony of Macau, announced plans to develop a huge casino complex that will feature an underwater gaming hall with 450 tables and 3,000 slot machines. The proposed complex will also include two hotels, a shopping mall and a 4,000-seat concert hall.

His partner in this new venture is Australian publishing magnate Kerry Packer, said to be worth $5 billion. Ho and Packer paid an estimated $214 million for the land on Macau’s Cotai Strip, where Las Vegas Sands plans to develop its own $12 billion Las Vegas-themed gambling complex, its second property there.

Earlier this year, the MGM Mirage announced that it would develop a $975 million waterfront resort and casino in Macau, which is located 40 miles west of Hong Kong on the southern coast of Guangdong Province.

Gambling is banned on the mainland of China, but Macau has traditionally been a magnet for gamblers from all over Asia. However, the city has never seen a boom like the current one. Gaming revenue in Macau is expected to grow by 20 percent in the next few years; this year alone Macau is expected to pass Las Vegas as the most lucrative casino market in the world.

As if to emphasize the Las Vegas connection, the Macau government recently sponsored Macau Week in Las Vegas, with events at several major hotels that positioned the city as the “entertainment capital of Asia.”

For 42 years, Ho, a Hong Kong entrepreneur, had a monopoly on casino gaming in Macau. His 12 properties, including the famous Lisboa Hotel, accounted for an estimated 60 percent of the city’s $7.5 billion economy and brought in 58 percent of the government’s revenue through gambling taxes.

In 1999, however, shortly before Macau was handed back to China (Hong Kong was handed over in 1997), the Beijing government announced that it was accepting bids for new casinos, setting off the current scramble for licenses.

Since then, two major players in Las Vegas, Steve Wynn and Sheldon Adelson, have moved ahead with plans to open their own casino operations in Macau. Last year, Adelson opened the Las Vegas Sands there, and Wynn’s resort is scheduled to open in 2006.