Macao
The tables are turning in Macao, Asia’s top gambling den, which now rivals Las Vegas in size. Given their mature domestic market, US casino operators began placing big bets on China’s only legal gambling market after it liberalised in 2002.
Las Vegas Sands is spending $12bn-$15bn in Macao and next month industry veteran Steve Wynn will open his first casino. That has shortened the odds for local tycoon Stanley Ho, who had long monopolised Macao’s tables.
In an echo of its gangland reputation, the territory has experienced the first murder of a casino manager since 1996. Still, newcomers can take comfort that Macao’s government will be quick to crack down on organised crime, not least since gambling and taxes contribute 70 per cent of its revenues.
There are fewer assurances on the competitive landscape. Macao now has 21 casinos with 2,000 gaming tables; come 2010, that will more than double to 4,500. New entrants are piling in all the time, wowed by speedy break-even times and proximity to mainland China, home to some of the world’s biggest gamblers. External competition is escalating as other Asian governments latch onto casinos as a potential economic stimulus. Some US operators are hedging their bets: Sands, for example, is also investing in Singapore.
There are other reasons why Macao could sour. These include constraints such as labour (the population is below 500,000). Gaming taxes are far higher than in Las Vegas. Macao’s bread-and-butter Chinese gamblers have traditionally been the high-rollers; the burgeoning mass market requires different skills and infrastructure. Shares of companies operating in Macao are among the most expensive in the gaming universe
