China's Big Import: Vegas

Resort Companies Are Cloning the Glitter for a Rapt Audience, but It's Not a Sure Bet

Photos
Raising the Stakes
The same companies that erected many of Las Vegas's more prominent resort casinos are now investing billions of dollars in Macau, a former Portuguese enclave on the Chinese coast.

MACAU

In years past, Raymond Wong laid his chips on the worn-out felt of the baccarat tables at the Lisboa casino, a windowless space that epitomized the seedy reputation of this gambling enclave in southern China. Cigarette smoke hovered over throngs jostling for spots at the tables. Prostitutes trawled the hallways.

But on a recent evening, Wong instead went to the glass-fronted Sands Macao casino, a landmark property erected by the Las Vegas Sands Corp., best known for its Venetian hotel in Nevada. With its seven restaurants, live cabaret acts, and private club complete with wine cellar and spa, the $265 million Sands has become an emblem for this Asian gambling haven, which is pursuing an aggressive transformation to capitalize on the growing affluence of China.

"The air is better, and the furnishings are all new," said Wong, 55, who rides the ferry from Hong Kong once or twice a month. "This is something fresh."

Enticed by growing numbers of visitors from China, the world's most populous country, the same companies that erected many of Las Vegas's more prominent resort casinos are investing billions of dollars in this former Portuguese colony. They are bidding to turn Macau from a place synonymous with prostitution, money laundering and binge gambling into what some are billing Asia's Las Vegas -- a hive of trade shows, restaurants, shopping and entertainment, in which gambling is but one piece of a glitzy resort experience for the masses.

"What we did was simply build the antithesis of what was here already," said Frank McFadden, chief operating officer of Venetian Macao Ltd., which operates the Sands, as he sat in a velvet lounge chair in the cigar room of the members-only Paiza Club. "It's a proven experience that works, and it's just being put into a pure virgin market."

Already, though, the market is huge. Macau's gambling revenue nearly tripled to $5.8 billion last year from $2 billion in 2000, according to the local government, pulling nearly even with the world's most lucrative gambling center, the Las Vegas Strip, which last year took in $6 billion, according to the Nevada Gaming Control Board.

The gambling boom has enticed Singapore to pursue its own casino plans, with major companies flocking to that island nation as well in pursuit of large-scale projects.

"The proclivity of Asian people to gamble is pretty staggering," said Terry Lanni, chief executive of MGM Mirage, whose $1.1 billion, 600-room MGM Grand Macao is slated to open late in 2007. "People borrow from loan sharks and gamble with it."

Here in Macau, the outside investors are betting they can carve into the empire of Stanley Ho, the 84-year-old magnate who enjoyed a gambling monopoly here for four decades, before Macau's government opened the door to foreign firms in 2001. Ho and his family still operate 15 of Macau's 18 casinos.

Across the street from Ho's Lisboa -- still the top-grossing property in town -- Wynn Resorts, led by Las Vegas icon Stephen A. Wynn, is erecting a $1.2 billion, 600-room hotel and casino slated to open in early September. It will include 200 gambling tables, 340 slot machines, a ballroom seating 700 and 28,000 square feet of retail space.

"There's a huge untapped market," said the president of Wynn Resorts (Macao) SA, Grant R. Bowie. "We've just got to build a destination."