China's strategy is to turn Macau into the Las Vegas of Asia, according to a report by Hong Kong-based UBS Investment Research, Macau Gaming - Let the Games Begin. It says the political incentive is driven by the upcoming 10th anniversary of Macau's handover to China in 2009. UBS says a common language, proximity (with a billion people within three hours flight time), and a limited variety of entertainment avenues in China, give Macau the social advantage.

The report adds that China's economic growth provides sustainable finance for gaming pursuits in Macau. Last year, Macau earned US$5. 4 billion from gaming - narrowly beating the Las Vegas Strip (US$5. 3 billion) as the world's largest gaming centre.

A pivotal decision by the Macau Government - to end a 40-year monopoly on casino operations in 2002 by granting three new licences - triggered the current development boom in Macau.

Two of the new licenses went to new players - Wynn's Resorts from Las Vegas, and Galaxy Consortium, controlled by the Hong Kong group K-Wah. As well, several sub-concessions were issued, including one to Las Vegas Sands, whose Chairman, Sheldon Adelson, last month unveiled plans to build a US$15-billion replica of the Las Vegas Strip on Cotai Strip in Macau. (Cotai is the reclaimed land between two islands - Coloane and Taipa). Sheldon told Hong Kong reporters the strip could have as many as 60,000 rooms.

The strip has been carved into seven parcels of land. At this stage, six hotels, each supported by a casino, are planned, with leading hotels groups including Starwood, Marriott, InterContinental, Regal and Four Seasons committed to plans collectively worth US$2. 5 billion.

Several Australian companies have already tapped into opportunities in Macau. These include WT Partnership, a quantity surveying firm; Meinhart, an engineering firm, the Sanderson Group, a theme park designer and contractor; and Leighton Asia (Northern), part of the Leighton Group.

The Australian Gaming Manufacturers Association plans to hold its trade exhibition in Macau in June. Ross Ferrar, the Association's Chief Executive, says members including Aristocrat, Ainsworth Machines and Stargames are already exporting slot machines to casinos in Macau.

Such are the prospects for Australian companies that the Australian Chamber of Commerce in Hong Kong has set up a chapter in Macau to service the growing number of Australians working there.

Macau's economy grew 25 per cent last year, says Mark Wood, Austrade's Trade Commissioner responsible for Macau. Growth is being driven by the arrival of Chinese tourists. Macau and Hong Kong have benefitted greatly since Beijing decided to lift restrictions on travel to the two SARs last year. Individuals can travel to both Hong Kong and Macau without joining an official tour group.

Wood says some 15-20 million tourists visited Macau last year. When put into the per capita context of Australia's population of 21 million, it means a staggering 600 million tourists. Wood says the average stay of the Chinese visitors is 1. 25 days. The strategy of the Macau Government is to double that stay, but currently there are not enough hotel rooms. He says it will probably take five years before Macau has enough rooms to meet the anticipated increase in tourist arrivals. As the new hotels get up and running, Wood says a major concern will be sourcing of fresh produce - including seafood, vegetables and fruit. "We are working to develop a supply chain to hotels in Macau," he says.

Australia is currently a leading supplier of fresh food produce and wines to hotels in Hong Kong.

As well as casinos and hotels, a wide range of entertainment facilities will be built in Macau in coming years to liven up tourist attractions in the former Portuguese enclave.

Aside from construction of the casinos /hotels/entertainment complexes, Wood says Macau will need additional housing, hospitals, schools and other facilities to house its growing population. Macau has a population of 500,000 and will have to rely on migrant workers to fill newly-created jobs. There will be a need for both education offshore and new joint ventures with vocational schools in Macau to train new workers. Macau has already started to import workers from the Philippines and India, according to sources.

The second area is the civil service, Wood says. The Government has had to adjust its civil service infrastructure to deal with the huge volume of work coming from the waves of activity. It will have to issue work permits for thousands who arrive to work in Macau's casinos and construction sector, deal with new licences and monitor the industry.

Wood says Australia can play a role in helping train more Macau people to cope in areas such as licensing and monitoring. A team from the Macau public service arrived in Australia recently to see how Australia's Centrelink system works. Macau needs to move to electronic government to keep pace with development. The Government hopes to deliver more services online and to streamline of its call centres.

Elsewhere, gaming in Asia is booming.

Last month, Singapore gave the nod to two integrated resorts with a casino each to be built on Sentosa Island and a new reclaimed area known as Marina Bayfront.

Not be outdone, the Philippines Amusement and Gaming Corporation (PAGCOR) plans a US$15-billion project on reclaimed land on Manila Bay to rival Macau. Rafael Francisco, President of PAGCOR, said last year that he would like to speed up the project to catch up with Singapore and Thailand (planning an integrated resort at Khao Lak, near Phuket).

Austrade's Senior Trade Commissioner in Manila, Alan Morrell, says the idea is to make Manila a tourist attraction along the lines of Las Vegas, with a variety of entertainment, such as shows and rides. Apparently, potential investors have begun discussions with PACGOR. But as Austrade sees it, a major hindrance is the expiration of PAGCOR's charter in 2008. Investors would like to be assured that the Government will extend PAGCOR's charter beyond 2008.

Negotiations are on hold until Congress passes a Bill extending PAGCOR's charter, probably for another couple of years. PAGCOR hopes the Government will pass its Bill this year, and is mindful that neighbouring countries like Singapore have already announced their plans for casinos. Sources says that if the Bill is not acted on quickly by Congress, the Master Plan may not proceed as envisaged - especially if potential investors start looking at neighbouring countries as option.

Other news from around the same time

Harrah's Completes Mega-Merger With Caesars - Sunday 12th of June 2005

Harrah's Entertainment buy-out of Caesars Entertainment officially closed Monday. Harrah's is once a....

Rock music calms casino job seekers - Sunday 12th of June 2005

The people in the long line outside the Mississippi Coast Coliseum on Monday morning weren't there t....

Casino Regina Will Host Canada's Largest Poker Tournament - Sunday 12th of June 2005

Las Vegas Sands Corp. (NYSE:LVS -News) announced today that the Company retired all of its outstandi....

Las Vegas Sands Corp. Retires Sands Macao Casino Debt Early - Sunday 12th of June 2005

Las Vegas Sands Corp. (NYSE:LVS -News) announced today that the Company retired all of its outstandi....

Harrah's closes merger with rival Caesars - Sunday 12th of June 2005

"We are pleased to bring our two great companies together," Gary Loveman, chairman and chi....

Grand mother smiling at 70 - Sunday 12th of June 2005

Dee Evans, a witty redhead with sparkling eyes, doesn't look like she's been dealing cards for 49 ye....

6,000-ton casino boat afloat - Sunday 12th of June 2005

A new $163 million Blue Chip Casino boat, weighing more than 6,000 tons, should be ready for gambler....

Fred Done gambling on 'sexy' casino venture - Sunday 12th of June 2005

BOOKMAKER Done Brothers is making a multi-million pound drive into the online gaming sector.Fred Don....

Penta owns largest odds-betting network in CE Europe - Sunday 12th of June 2005

Czech odds-betting company Fortuna, Slovakia's Terno and Poland's Profesjonal generate annual sales ....

Mangaung casino on track - Sunday 12th of June 2005

Construction work on local empowerment company Mangaung Sun's R240m leisure development, the Windmil....