Macau beats Vegas at its own game - Thursday 26th of July 2007
Take 1,000 blackjack tables, hundreds of roulette wheels and a network of fake Venetian canals.
Spice with a bevy of Playboy bunnies and the occasional squad of Premier League football players, sweeten with a gambling-mad population of more than a billion people and then mix in the biggest hotel in Asia. The result? The entertainment hub of Macau, which has overtaken Las Vegas in gaming revenues and now looks set to be the gambling capital of the world for decades to come.
In a sign of newfound pulling power, Manchester United will visit for an exhibition game here next week. While the tabloids are likely to focus on the presence of enthusiastic gambler Wayne Rooney in one of the worlds biggest casinos, the real significance of the match on Monday is that it marks a new stage in Macaus push into the international limelight.
Rooney, Cristiano Ronaldo and their team-mates are the advance guard of an army of international sports and music stars making their way to this former Portugese colony (now, like Hong Kong, a special administrative region of China) just as Elvis Presley and Tom Jones made a beeline for Nevada in the 1970s. In October, the enclave will host a National Basketball Association extravaganza. In the following month comes tennis, with Pete Sampras playing Roger Federer. There are also plans for big-name concerts and circuses.
They represent a shift in the international balance of capital and culture as China grows richer and more powerful, just as globalisation has an ever greater impact.
Drawn by the proximity of Chinas 1.3 billion-strong population, Americas tycoons are opening casinos and hotels here at the rate of almost one a month.
The biggest will be the Venetian Macau with 3,000 hotel suites, 850 tables, 350 shops, a 15,000-seat entertainment arena, multi-purpose theatre and network of canals which will be Asias biggest hotel and a contender for the most lucrative casino in the world.
But this resort, which opens fully in August, is just the beginning for the new strip on the reclaimed land of Cotai. Christie Hefner recently announced plans to build Chinas first Playboy Mansion here. International designer brands are lining up to open shops nearby.
"Macau is a phenomenon. When people ask me what is China like?, I tell them go and look at Macau," said David Tang, a Hong Kong businessmen and designer who will open a boutique on the Cotai strip. "It is a bit wild west, frantic about money, frantic about building and screw the rest. It is supremely capitalist."
Macau is awash with cash and tourists. Every year, billions of dollars of investment are pouring in from overseas just as billions of Chinese yuan in gambling revenues flow in from the Chinese mainland, Hong Kong, Taiwan and Japan. In the past decade, visitor numbers have more than tripled to pass the 20 million mark. This in a cosy island community of just 500,000 people.
Such is the surge of construction that even mainland China looks laggardly by comparison. The skyline is never still as cranes, scaffolding and tens of thousands of labourers reshape this traditional and culturally rich territory. It is not always a pretty sight.
To emphasise the wealth of the island, many new casino resorts are not just illuminated by neon but built with garish materials. The Sands is made of burnished gold; the MGM Macau, which opens in November, is a cigarette-lighter shaped complex layered in gold, silver and bronze, while towering above them both is the half-completed lotus of the Grand Lisboa. By day, it looks like a giant piece of cheap jewellery, but at night the illuminations are stunning.
It is owned by Stanley Ho, the local patriarch who had the monopoly on gambling in Macau until 2002. Until then the territory had a reputation for Triad gangsters, money laundering and prostitution. But with the liberalisation of the market, international capital has transformed the gambling business. Mr Hos Sociedade de Jogos de Macau (SJM) group is now racing to catch up with new American competitors.
"Macau is going through a period of accelerated evolution," said Frank McFadden, president of new business development at SJM. But he says the target is not Las Vegas, which is also growing rapidly. "We are really after the Chinese market. The savings ratio there is high and more than 40% is being moved into stock. They have a high level of disposable income."
Mr McFadden knows the potential. He was formerly manager of Sands Macau, which recouped its initial investment less than a year after it opened in 2004. The Grand Lisboa is still only partly finished, but it claimed a million visitors in its first month after the casino floor opened in February.
Across the road is the Wynn resort, which began business last September offering gambling, fine dining for 1,000 people and top-of-the-range bedroom suites for HK$35,000 (£2,200) complete with butler service and massage room.
"We have seen fascinating changes," said Reddy Leong, PR manager for the resort. "Ten years ago, nobody had heard of Macau so we used to have to tell them it was a place near Hong Kong. But now, everybody knows."
Macau is trying to move upmarket. With the development of the Cotai strip, it wants to attract more conference and exhibition business, extending the average visitors stay from a fervid 1.2 days to a more relaxed 3.5 days.
There are concerns, however, that the growth of the gambling industry could destroy the local community and its mix of Chinese and Portuguese traditions. There is more money than ever before, but also more traffic, a higher divorce rate and the closure of small businesses that cannot afford a tripling of rent prices. University students are being lured away from their courses by the prospect of $2,000 per month dealer salaries - far more than they could earn in most other more skilled jobs.
"A lot of wealth has been gained by a lot of people. But we dont know what the long-term impact of that will be on the community," said Glenn McCartney, a lecturer, pub owner and honorary British consul.
Since he came to Macau in 1997, Mr McCartney says annual visitor numbers have increased from 7 million to 22 million. They are expected to hit 36 million by 2010. Almost all come to gamble, but he says it is important for tourists and investors to remember that they are visiting and building on something more substantial than the sands of Nevada. "I dont like to say that Macau is the Las Vegas of Asia because it is different. Las Vegas came out of the desert, but this is a place with history, where people have lived for generations," he said.
The expansion still has a long way to go. Next year, hundreds more tables, slots machines and hotel rooms will come on line. Local businessmen expect economic growth to sizzle along at 20% a year at least until 2012. And to keep the high-rollers rolling in, the authorities are planning a $3.8bn bridge that would link Macau with Hong Kong and the mainland city of Zhuhai.
There is concern that capacity may exceed demand. But as long as the Communist government in Beijing supports this cash cow by banning gambling on the mainland while keeping the borders open to Macau, prospects are likely to remain rosy. The urge to bet among Chinese punters shows no sign of flagging.
The big names
$7.2bn gross gaming revenues in 2006 at 22 casinos.
Former Portuguese colony with a long tradition as a bastion of Catholicism, handed over to China in 1999. The gaming industry has been the mainstay of the economy for decades. Until 2002, it was monopolised by the local tycoon Stanley Ho. For much of that time, Macau had a reputation for Triad gangs, money laundering and prostitution. But in recent years, the market has been liberalised and many US-owned casinos have opened on the main island and along the new Cotai strip, aimed at the exhibition, conference and entertainment market.
$6.6bn gross gaming revenues in 2006 at the strips 40-odd casinos.
The casino strip was largely built from the sands of Nevada after gambling was legalised in the US in 1931. Famed for decades as a centre of organised crime and prostitution. Experienced a building boom in the 1990s as resorts such as the Wynn arrived with a promise of more family-oriented leisure experience and the attraction of big names such as Celine Dion.
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