Casino Giants Take Their Vegas Battle To Tables of Macau
Wynn, Sands Bet High Rollers
Will Flock to Flashy Sites
In Formerly Dingy Locale
Gondoliers Singing 'O Sole Mio'
MACAU -- For two years, billionaire Sheldon Adelson's Las Vegas Sands Corp. has been the only U.S. casino operator to enjoy the explosive growth of gambling on this tiny nub of Chinese territory near Hong Kong. Las Vegas Sands already has one booming casino open here, and last week it staged a theatrical presentation, complete with Chinese drummers and dancers, to hype next year's opening of a much bigger and more lavish second property.
But now Mr. Adelson has company. On Wednesday, legendary American gambling mogul Steve Wynn opened his $1.2 billion Wynn Macau, a near-replica of Wynn Resorts Ltd.'s splashy Las Vegas resort. With dancing fountains and a stylish nightclub, the Wynn casino is upping the stakes on both men's bet that Macau, long known for dingy, locally operated gambling halls, is ready for high-end razzle-dazzle.
Mr. Adelson took the lead by jumping into Macau early, targeting the mass market with a super-sized casino that boasted more Las Vegas flash than anything that came before it. He now hopes to attract business conventions and lure attendees into his casinos. Mr. Wynn held back, saving his ammunition to target high rollers with deep pockets.
Along the way, the two have stumbled and collided, exporting to Chinese shores the intense rivalry they have kept up for more than 15 years in Las Vegas, where they operate sprawling megacasinos across the street from each other. Macau represents a chance for Mr. Adelson to get the upper hand on Mr. Wynn, a Las Vegas icon who is credited with reinventing the city as the head of Mirage Resorts Inc. before selling the company and starting over with Wynn Resorts.
Seated in a two-story penthouse suite atop the Sands Macao recently, the 73-year-old Mr. Adelson professed to be unconcerned about the competition. "Steve Wynn's opening here will be a nonevent," he said, ignoring his wife's gestures to keep quiet. "He's 2? years too late."
The next day, Mr. Wynn, 64, fired back. He derided the Sands Macao as a "Wal-Mart-type" operation with an uninspired design that proves Mr. Adelson lacks the panache to go after high rollers. "Sheldon is quick to dismiss all of his Las Vegas competitors as ignorant to the ways of Chinese gamblers," he said. "But he forgets the hundreds of millions of dollars I've won [in Las Vegas] from Asian baccarat players."
The trash-talking indicates how much the gambling industry has at stake in China. Gambling is hugely popular here, and Macau, a former Portuguese colony an hour's ferry ride west of Hong Kong, is the only place in this newly prosperous country of 1.3 billion people where casinos are legal. The local, Beijing-backed government, eager for the territory to shed its reputation for seedy gambling dens, prostitution and gangland violence, broke the 40-year casino monopoly of local tycoon Stanley Ho in 2000 and began licensing outsiders. All the world's big casino companies are now seeking a foothold in the market. In 2002, Messrs. Adelson and Wynn became the first Americans to win licenses here. MGM Mirage later won a license and plans to build its own casino-resort, too.
Enormous Results
Even in its ramp-up phase, the results have been enormous. Last year, Macau attracted 10.5 million Chinese visitors, a 147% jump from just three years earlier. Thanks to legions of newly wealthy Chinese and an easing of travel restrictions, Macau's casino market has overtaken Atlantic City in size. It generated $5.6 billion in casino-gambling revenues last year, second only to the Las Vegas Strip's turnover of $6 billion.
Most of Macau's gambling revenue, about 80%, is for now generated by locally owned casinos. Many are run by Mr. Ho, including his flagship Lisboa casino, a warren of betting parlors directly across the street from Wynn Macau. The U.S. companies aim to attract a different crowd -- big spenders from the mainland and elsewhere who can gamble, and lose, much bigger sums.
It's no sure thing that Vegas-style casinos will work in Macau, where most visitors stay just for one day and usually leave their kids at home. New developments could triple the number of hotel rooms by 2009, raising fears of a glut. "This kind of resort is so untested in this market it's hard to feel overwhelmingly confident about what the outcome will be," Mr. Wynn said. "I don't feel comfortable about making blanket predictions."
Nevertheless, both Las Vegas Sands and Wynn Resorts have big plans to transform the gambling landscape here. The Sands Macao, with its vast, cathedral-like interior, is unlike any other casino here. Located on Macau's densely built main peninsula just a short walk from the ferry terminal, the Sands boasts floor shows from scantily dressed Chinese dancers to an all-female string quartet from Bulgaria. It's been a big hit: The casino recouped its investment within a little more than a year, according to industry officials. In the six months ended June 30, the Sands Macao reported $592 million in revenue, outshining the $455.3 million from the company's flagship Venetian Las Vegas. The reclusive Mr. Ho told Asian media recently that Las Vegas Sands could force some of his casinos into bankruptcy.
Mr. Adelson's biggest push is yet to come. Seeking new space to expand, he is developing an area dubbed the "Cotai Strip," a muddy stretch of reclaimed land between two small islands that are connected by bridges to Macau's main peninsula. Mr. Adelson is intent on making Cotai "Asia's Las Vegas Strip." The anchor will be the 3,000-room Venetian Macao with its giant casino and high-end shopping mall, all built to a Venice theme -- complete with man-made lagoon and Chinese gondoliers serenading customers with "O Sole Mio." (The complex will also include a convention center and 15,000-seat arena.)
Mr. Wynn is close on Mr. Adelson's heels. In addition to the Wynn Macau in Macau's crowded city center, his company plans to build two or three casinos on a 54-acre parcel on Cotai. By following his rival to Macau's new property frontier, Mr. Wynn hopes to learn from any mistakes Las Vegas Sands might make on the Cotai Strip. Mr. Adelson insists that there's no substitute for being a first-mover and says that arriving late to Cotai will be useful only "if your object is not to make money."
Sheldon Adelson is developing an area of Macau dubbed the "Cotai Strip," whose anchor will be the 3,000-room Venetian Macao and a giant casino, convention center, stadium and high-end shopping mall.
Both Las Vegas Sands and Wynn have had a tough time finding their sea legs in Macau, a one-time backwater of 453,000 people that took off economically only after Portugal handed control to China in 1999. Mr. Adelson, in particular, faced a series of high hurdles in lining up financing that would prove to local officials that he could pull off his projects.
Las Vegas Sands initially turned to a Taiwanese bank, CDIB, for financing. But Jorge Oliveira, the head of legal affairs for the Macau Gaming Commission, says the presence of former Taiwanese generals on CDIB's board made the arrangement politically unpalatable, given the tensions between China and the island it views as a renegade province.
Next Las Vegas Sands hooked up with Hong Kong-based Galaxy Casino SA, proposing a joint project in which it would have held a minority stake plus the management contract for the casino and hotel. But relations between Las Vegas Sands and Galaxy soured, and lawyers from the two companies eventually refused even to talk to each other in joint meetings with the Gaming Commission.
That spelled trouble when Galaxy won a casino license and Las Vegas Sands, with no license of its own, was left stranded. But Macau regulators, eager to upgrade Macau's image, were impressed by Mr. Adelson's past record of turning Las Vegas into a convention destination. His Cotai Strip proposal seemed a perfect fit for a neglected patch far from Macau's traditional gambling action.
Mr. Adelson constructed the cavernous Sands Macao, above, after consulting a master of feng shui, but rival Steve Wynn derided it as a "Wal-Mart type" operation with an uninspired design. Top, the Sands' main casino floor.
So Macau authorities bent their own rules and gave Las Vegas Sands the go-ahead as a "subconcession" to the license they awarded Galaxy. To avoid allegations of favoritism and make room for additional big players, they later created subconcessions under the two other licenses, effectively doubling the number of casino operators they had originally intended to permit.
Armed with his license, Mr. Adelson made an attempt to team up with Mr. Wynn. That was an odd overture given their history together. Acrimony between the men dates back to 1989, when Mr. Adelson -- who owned the computer-industry tradeshow Comdex -- expected Mr. Wynn to waive fees for using meeting facilities at the Mirage, which Mr. Wynn then operated. In later years, the men clashed over casino designs, parking facilities and bragging rights in Las Vegas.
In Macau, Mr. Adelson proposed that they build a temporary casino together on Wynn Resorts land, freeing up both companies to develop permanent gambling palaces on the planned Cotai Strip. But Mr. Wynn balked, claiming he was too busy getting his own new Las Vegas casino off the ground. So Mr. Adelson struck out on his own, deciding to quickly erect the cavernous Sands Macao casino to tap into Mr. Ho's lucrative business catering to day-trip gamblers.
Mr. Adelson tailored his product to local tastes. The Sands Macao includes a rounded, tower-like hotel structure that the company designed after consulting a master of feng shui. Images of dragons and the Great Wall of China adorn many of the casino's 1,254 slot machines. Unlike in U.S. casinos where complimentary cocktails and beer flow freely, Chinese gamblers mostly eschew alcohol at the betting tables. They drink bottled water or hot tea with milk. In another contrast, the table game is king here, while in the U.S., slots are the big moneymakers. Baccarat and the dice games "Big and Small" and "Chicken, Crab and Fish" are more popular than blackjack, craps and poker.
To Mr. Adelson's surprise, the Sands' largely mainland clientele showed much more interest in gambling than fine dining. So the casino closed one of its five restaurants and shrank the massive buffet, replacing it with more gambling. "For the time being, this is the best casino in China," gambler Deng Zhiwen said as he relaxed one afternoon at the bar. Mr. Deng, a 30-year-old government employee from the southern city of Guangzhou was making his sixth visit to the Sands. He used to patronize Mr. Ho's Lisboa casino.
Mr. Adelson's vision for Cotai is more ambitious. As he's done in Vegas, he plans to target the convention business with up to 14 name-brand hotel-casino resorts surrounding the Venetian. And he's aiming for 3 million square feet of retail space on the Cotai Strip, including 350 shops inside the Venetian alone -- more than three times the number of outlets at his resort in Vegas.
Galaxy Senior Vice President Ciaran Carruthers questions Mr. Adelson's assumptions about the appetite mainlanders will have for high-end shopping. "They're probably not going to come here for five or six Louis Vuitton shops or a Hugo Boss suit. They can get that in Shanghai or Beijing, and probably at a cheaper price," Mr. Carruthers says. Yet given that Macau charges no value-added tax on purchases of luxury goods, Mr. Adelson's idea might not prove to be such a bad bet.
Trouble Adapting
Mr. Wynn has had his own troubles adapting to Macau's idiosyncrasies. One problem that vexed him for years involved his plans to extend credit to customers. When the territory granted its gambling concessions in 2002, it still lacked a law that permitted casino operators to offer credit. Most players in Macau are lent money by the organizers of gambling junkets that bring people in. In Nevada, by contrast, regulators prefer that casinos be the ones to provide credit so that loan sharks don't prey on overextended gamblers.
Mr. Wynn wanted the right in Macau to extend credit to high rollers. So he lobbied Macau's Gaming Commission to pass a credit law similar to Nevada's. Authorities in Macau balked.
"He was very unhappy about that," and he vented his frustration as if he held "a megaphone," recalls Mr. Oliveira of Gaming Commission.
In a bit of brinksmanship, Mr. Wynn postponed breaking ground on his casino and threatened to pull out of the territory altogether. Macau finally passed a gambling credit law in 2004.
Mr. Wynn says he merely needed time to arrange financing that hinged on the legal changes, and didn't want to rush into a new resort in Macau without "doing it right, not fast." On another occasion, Mr. Oliveira recalls Mr. Wynn losing his temper over differences between the fire-safety codes in Nevada and Macau. "With Steve, there will be shouting and there will be hugs, at intervals," he says.
Mr. Wynn won praise in May when he paid $10.1 million for a Ming Dynasty vase at an auction, and then donated it to a local museum -- though for now the piece remains on display in the VIP wing of his new hotel. Mr. Adelson carps, "That's not a grand gesture, that's grandstanding."
The Wynn Macau strikes one opulent note after another, from the original Renoir hanging behind the reception desk to the Fendi, Rolex and Prada shops along the marble concourse. Chandeliers and plush carpets create a glamorous ambience for gamblers, thousands of whom poured into the resort after it opened its doors at midnight Wednesday morning.
Mr. Wynn sold a subconcession of his license for $900 million to Melco PBL, a joint venture between Melco International Development Ltd., led by Stanley Ho's son Lawrence, and Australia's Publishing & Broadcasting Ltd., run by James Packer. Mr. Packer's father, the late Kerry Packer, was a friend of Mr. Wynn. "The sale was a masterstroke," says Galaxy's Mr. Carruthers. "That puts you about as close as you can be to breaking even before you even open."
Meanwhile, competition is intensifying for everyone, with more than a dozen casino projects in the works between now and 2010. Galaxy's new flagship, the StarWorld, is set to open soon next door to the Wynn Macau. Another of Mr. Wynn's future neighbors, Stanley Ho's Grand Lisboa, is a work in process designed to resemble a lotus flower made of gold ingots. The MGM Grand should add to this downtown action in 2008.
Cotai will gain more critical mass with Galaxy's Cotai Mega Resorts and Melco PBL's extravagant City of Dreams, which -- going one up on Vegas -- bills itself as the world's first underwater casino.
澳门博彩业激战正酣
两年来，美国亿万富翁谢尔登?阿德森(Sheldon Adelson)的拉斯维加斯金沙公司(Las Vegas Sands Corp.)一直是唯一一家享受着澳门博彩业爆炸性增长之益的美国赌场运营商。该公司在澳门已经营着一家赌场，生意非常兴旺；上周，它又为自己将于明年开业的另一家赌场发起了宣传攻势，仪式上中国舞乐一齐上阵，场面非常热闹。金沙公司在澳门的第二家赌场无论是规模还是奢华程度都要超过第一座。
但阿德森在澳门独享盛宴的好日子本周算是到头了。美国博彩业传奇大亨史蒂夫?永利(Steve Wynn)斥资12亿美元在澳门兴建的永利渡假酒店(Wynn Macau)周三就要开业，它几乎就是永利渡假村有限公司(Wynn Resorts Ltd.)在拉斯维加斯赌场的翻版。设有舞蹈喷泉和时尚夜总会的永利渡假酒店使永利和阿德森两位大亨在澳门博彩业所下的赌注进一步加大。两人都认为，一直被本地人经营的低档赌场所主导的澳门博彩业已具备了提升档次的条件，他们都希望未来岁月中能从澳门高档赌场的大繁荣中获利。
两人在澳门博彩业的竞争中阿德森算是占得先机，他首先瞄准了大众市场，建立了一家规模超大的赌场，宣称它比澳门此前的所有赌场都更具拉斯维加斯色彩。永利则另辟蹊径，将目标客户锁定在那些腰包鼓鼓的赌场豪客身上。
就这样，两人在澳门开始了面对面的竞争，他们的战场又从拉斯维加斯转移到了澳门。15年来，两人在拉斯维加斯的赌场一直在捉对厮杀。澳门为阿德森提供了在与永利的竞争中占据上风的机会，而永利这位以梦幻渡假村集团(Mirage Resorts Inc.)而被视为重塑了拉斯维加斯的人将凭借永利渡假村再铸辉煌。
最近的某一天，阿德森坐在他位于澳门金沙娱乐场(Sands Macao)楼顶的豪华阁楼内自信满满地说，他对自己的老对手进军澳门并不感到担忧。“史蒂夫?永利在这里是雷声大雨点小，他晚了两年半，”阿德森侃侃而谈，毫不理会他妻子要他闭嘴的手势。
永利第二天就作出回击。他嘲笑金沙娱乐场是一个“沃尔玛式”的买卖，其平庸的设计证明阿德森缺乏吸引高端赌客的手段。永利说：“谢尔登轻率地断言他在拉斯维加斯的所有竞争对手都不了解中国赌客的口味，但他忘了，我(在拉斯维加斯)从玩百家乐的亚洲赌客身上已经赚了数亿美元。”
从这场针锋相对的口水仗可以看出博彩业在中国的经营风险之大。博彩业在中国有巨大的市场，而距香港仅一小时水路的前葡萄牙殖民地澳门则是中国唯一承认博彩业合法地位的地方。受到中国政府支持的澳门地方政府急于使澳门摆脱赌博、卖淫和黑帮势力聚集地的声名，于2000年结束了本地大亨何鸿
