High Rollers 12-15-2006

There’s a new champion in the world of high-stakes gambling.

Macau recently passed Las Vegas as the gambling capital of the world. Macau’s 23 casinos posted $568.2 million in revenue, $19.6 million more than Las Vegas’s take, which was generated by 30 casinos.

And what appeared to be a long time coming has happened in only a few short years.

For decades, gambling in Macau, a sleepy former Portuguese enclave about 40 miles from Hong Kong on China’s southern coast, was controlled by Hong Kong billionaire Stanley Ho, who owned most of the casinos, including The Lisboa, his flagship property.

But in 1999, the colony was handed over to China, and in 2002, the government broke Ho’s monopoly by allowing others to bid for gaming licenses. Enter two high-rolling entrepreneurs from Las Vegas: Steve Wynn, owner of the 50-story Wynn Las Vegas, and Sheldon Adelson, his Vegas rival. Both announced ambitious plans to build massive casinos in Macau, and the results have been breathtaking.

The Empire

In 2004, Adelson opened the Sands, a $240 million mecca for gamblers with 300 tables and 500 slot machines that grossed $36 million in its first 10 weeks of operation. Such was the lure of Las Vegas-style gambling (gambling is forbidden on mainland China itself), that the Sands’ three massive glass doors were torn off their hinges by the crush of customers waiting to get in that first day.

And this past September, Wynn opened his crescent-shaped version of a Las Vegas casino, named, appropriately enough, Wynn Macau. The $1.2 billion hotel-casino complex, luxurious by any standard, offers six gourmet restaurants, a shopping esplanade, a health club and pool.

But that’s just the beginning. Both Wynn and Adelson can build an unlimited number of casino-resorts, and Adelson has already lined up investors for a strip of twenty, 3,000-room hotel-casinos, costing an estimated $12 billion, including a $1 billion recreation of the Venetian in Las Vegas, now under construction.

“The market is so huge and the opportunity is so incredible that we don’t think we can build enough resort capacity to fill the market,” said one hotel executive working in Macau.

A Las Vegas Model

Both Wynn and Adelson (and a half-dozen or so other companies that are planning hotel-casino complexes in Macau) are following the “Las Vegas model.” That is, they are trying not just to be just gambling destinations, but also entertainment and family destinations.

To lure non-gamblers, Macau has spruced up its image. Massive high-rises crowd the traditional colonial buildings, although enough of old Macau is still left. The new convention and entertainment center boasts seating for up to 1,600 and several restaurants and a 500-seat movie theater.

For the truly adventurous, the center’s 1,109-foot tower features a “skywalk,” where, for $75, visitors can walk around the rim of the building (held in place with a harness) or actually jump in a controlled, freefall to the bottom of the complex.

“Macau can no longer be just a gambling den,” said one industry analyst, adding that the companies developing properties in Macau “are bringing a sense of entertainment for the family as well as the man.”

With China’s 1.2 billion people and other Asian countries just a short plane ride away, the risk that Wynn, Adelson and others are taking seems worth the gamble. Or, as Adelson once said, “There is no downside.”

Macau, the only place in Asia with full-fledged legalized gambling, sits within a five-hour flight of 3 billion people nearly half the world’s population. Las Vegas, by contrast, is the same distance from only 450 million people.

Visitors arriving by air pass through Macau’s modern airport, which was built in 1995 and now services 14 regional and international carriers. Flights connect through South Korea, Japan and several cities in China, with EVA offering direct service from West Coast gateways Los Angeles, San Francisco and Seattle through Taipei (see sidebar). For visitors to Hong Kong, Macau is a one-hour hydrofoil ride away.

“Many agents are coupling [Macau] with Southeast Asia trips to add a completely different cultural aspect,” said Al Merschen, a spokesman for the destination. “And with Macau becoming a hub for low-cost carriers around Asia, it is really becoming a focal point for the region.

“Also, while a lot of attention is given to the gaming sector, agents should really sell the World Heritage factor of Macau, which is very different compared to Vegas,” Merschen said.

www.macautourism.gov.mo