Cashing in on Macau's casino gold mine - Thursday 12th of May 2005

Daniel Schultz places a call through to his account manager in Costa Rica and clears a huge bet that he then puts on red in one of the glitzy new casinos in the southern Chinese territory of Macau. No money changes hands, neither do any chips. There isn't even a roulette table nearby.In fact, the whole transaction is conducted over a mobile phone -- in the cafe.

"There is absolutely no need to leave the table even if you have to leave the table," jokes Schultz.This is the future of gambling Macau-style, a far cry from the smoky, seedy dens that used to rule the roost in this former Portuguese enclave that has been Asia's gambling haven for more than a century.Schultz is demonstrating the latest innovation from Realtime Gaming, an American company that claims to be able to put the thrill of the punt into a computer, a phone, even into a bathroom-door console.It plans to put computer-linked flat-screens in the unused -- or in business terms "wasted" -- corners of the city's casinos, allowing operators of the fast-proliferating gaming rooms to "monetize" every spare bit of space with online gambling consoles.Realtime Gaming is just one of hundreds of overseas companies looking to cash in on the mushrooming casino business here.

Dozens of them gathered for the city's first ever casino-supply expo two weeks ago and a similar event to be held in June is expected to attract 300 firms.Security equipment suppliers, LED screen builders, caterers and construction contractors are among the latest wave of businesses to join the clamour for Macau gold after the initial rush of casino operators, including MGM Mirage and Wynn Resorts, and hotel management firms, such as Starwoods.When the city reverted to Chinese rule five years ago, such foreign interest in the tiny southern territory would have been unthinkable.But Macau has changed, especially since May 18 last year when the first American casino opened in what had until then been a Chinese-only gambling sector.Sands Macau, owned by the Las Vegas casino giant that owns the hugely popular Venetian, brought glitz and glamour to a casino industry that had been dominated for 40 years by the down-at-heel gaming halls of tycoon Stanley Ho.Sands sparked a feeding frenzy of development that has seen an additional 25 casinos proposed to supplement the 16 already running.

Among the new proposals is a score of casino-hotel complexes on a huge reclamation, which, when complete, is expected to pull in more money than all the resorts on the Las Vegas strip.The sky is the limit, now, as Ho demonstrated last week when he fired his latest salvo in the brewing battle for control of the city's gamblers -- plans for a gigantic boat-shaped 6.2-billion Hong Kong dollar (800 million US) entertainment complex that features a 180-metre apartment tower and a soaring 600-room six-star hotel.With a sudden surge in mainland Chinese tourists fuelling this growth, Macau is now big business and everybody is trying to get a piece of the pie."I predict that within a few short years about 25 percent of all our casino business will be in Macau -- that's from very little now," said Scott Madding, international casino sales manager for the United States Card Company.With each casino in the city consuming some 20,000 cards each night, his company sees huge gains in the new-look Macau. "We'll be opening an office here soon to get a foothold here -- and we are not the only ones planning that," he adds. "The growth potential here is enormous." This is the kind of talk the city's financial bosses love.

When they decided to reinvigorate the ailing sector by relaxing foreign ownership rules for casinos three years ago, vested interests that opposed the move were placated with promises that the entire city would benefit in the long-run. Financially, it has gained in a very short space of time. Last year, increased gambling receipts earned the city's Beijing-backed administration 15.2 billion patacas (1.94 billion dollars). The industry is proving such a money-spinner that by the middle of last year, revenue from gambling taxes had already paid off the city's 13-billion pataca public-spending budget for last year. Residents were rewarded with tax cuts and the colossal civil service with pay rises. Foreign companies are being lured by the huge earning potential of Macau's handful of casinos. Last year they pulled in some 42 billion Macau patacas, the equivalent of the earnings made in all the casinos on the Las Vegas strip.

This year Macau's joints are expected to nudge the 7.5 billion dollars earned last year in the hundreds of casinos throughout the entire gambling state of Nevada. "The dollar amount on the tables at any one time here is higher than on any casino table anywhere in the world," said Madding. "The average off-the-street gamblers here spend as much money in one night as those we would consider high-rollers in Las Vegas.

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