In the first quarter of the year, Sand’s lost US$2 million, down from a profit of almost US$40 million last quarter and almost US$91 million during the first quarter of 2007. Income from the Venetian Macao and Sands Macao dropped from USD133 million in the last quarter of 2007 to USD.4 million in the first three months of this year.

“We lost significant amounts of market share of the VIP business …. It’s clearly an unsatisfactory result,” said Bill Weidner, president and chief operations officer, during a first quarter conference call.

As a result the company has decided to compete with other operators offering junkets — which bring in and finance high roller players — by providing higher levels of commission and access to credit. “Today, we’ve already responded and adjusted our commission rates to be more competitive in the VIP marketplace, with two principal objectives,” said Mr Weidner.

“One, growing our VIP market share and two, increasing our cash flow generated from this portion of our business.” In the past the company has been reluctant to offer credit to operators or players due to the potential difficulty of collection and the fact that bad debts are still taxed as revenue by the government.

However a new junket-aggregator at Melco PBL Entertainment Limited’s Crown Macau providing agents with access to lines of credit has seen many operators lose market share over the last three months. “We were talking about our provision for bad debts, is basically non-existent here in Macau. And it’s almost like a bank that doesn’t have a few bad loans they are probably out lending enough money,” said executive vice president, Brad Stone.

“We have expanded credit to our junket reps and as we’ve talked in the past we have done somewhat collateralised by the commissions we owe them. We are going to look at that as well and probably extend more credits to the junket reps themselves those who have performed well.” The results should start showing at the end of this month, the company said.

Overseeing the changes will be management flown in from the USA.

The President of the Las Vegas Venetian and The Palazzo and Senior Vice President of the company, Rob Goldstein will fly into Macau next week together with Mr Weidner to “focus on the evolving VIP market and the direct customer marketing environment in Macau,” said Mr Weidner. “As he will be there next week as will I, we can and we will execute better in the near term,” he added.

Mr Stone has already arrived in Macau to cut operating costs at the company’s two casinos. With a renewed focus on profitability Sand’s is aiming to open the new casino in the Four Seasons property — scheduled for opening in July — without hiring any additional personnel.

“We can operate our current facilities; The Sands Macao, The Venetian Macao more efficiently. Brad Stone is in Macau now heading up a swat team to rationalise operations as we prepare for and open the Four Seasons,” said Mr Weidner.

VIP gaming at the Four Seasons
Part of the new approach with VIPs will see the company dedicate much of the casino space in the Four Seasons development to VIP gaming. The ground floor of the casino will be dedicated to “premium” players brought in directly by the company, while above will see two floors of junket rooms and eventually each of the property’s planned for 19 mansions will house a casino.

Frustrated with the government
Although looking forward to seeing how the government implements the announced commission controls and limitations on new casinos, Sand’s remains frustrated with the approval process for its remaining plots on the Cotai Strip. Although work has started on its plots 3,7 and 8, it is yet to receive formal approval for the developments.

“We have just been frustrated because of some of the challenges within the government, based upon the scandal that happened here in an area that related to the Public Works Department,” said Mr Stone. “There has definitely been a slowing in the pace throughout Macau, of approvals,” he added.

Sheldon’s fantasy — casinos 10 percent of development
Company chairman Sheldon Adelson hopes last week’s announced casino restrictions will result in the closing of the smaller casinos which hire out VIP rooms, he said during yesterday’s conference call. “My fantasy is such, I mean when we first got involved in Macau we were assured that it would take a couple of years to phase out the VIP rooms,” said Mr Adelson.

“I think the announcement by Edmund Ho last week was a reaction to pressure he has gotten from both us and hopefully we don’t know for sure, because we are not that convinced about that kind of pressure, from the Chinese Liaison Office, that the way the development was going was not what they originally intended for it to be.

“So, we are hoping that our goal is to turn a city of seedy backwater gambling dens into a city of convention, business travel, and business and leisure travel, where the casino represent no more than 10 percent of the total amount of space.”

Courtesy :: Macau Daily Times

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City of Dreams Complex

According to the Daily Telegraph, Crown Macau owned by Melco PBL Entertainment, James Packer’s first casino foray in the city had a rocky start after its opening in May last year.

But its fortunes have been given a major boost as a result of a strategic deal late last year with a Hong Kong-listed junkets operator, A-Max, and the decision to refocus the casino entirely on the VIP market.

The aggressive deal with A-Max, which involves higher than industry average total commissions of up to 1.35 per cent, has helped bring VIP gamblers to the upmarket casino, taking market share off more experienced operators, such as Macau veteran Stanley Ho and new players Galaxy and the Macau Sands.

“Thanks to A-Max’s junkets, Melco PBL’s market share improved substantially from 5.7 per cent in November to 18.1 per cent in February, making Crown Macau the busiest casino in the world in terms of betting volume,” Credit Suisse’s Hong Kong-based gambling analyst, Gabriel Chan, says in a bullish new report on the company.

“If we focus on market share in the high-roller segment alone, the improvement was even more astonishing with market share increasing from 6.6 per cent in November to 24.8 per cent in February.”

“A-Max junkets generated about $US5.3 billion ($5.8 billion) in rolling chip turnover in February, up about 5 per cent month on month,” he said.

“In our view, there is room for further growth.

“We expect A-Max’s junkets to generate on average $US6.3 billion rolling chip turnover per month in 2008.” Packer’s Crown now has a 37.9 per cent stake in the company, which listed on the US Nasdaq market in late 2006, alongside the Hong Kong-based Melco, operated by Stanley Ho’s son Lawrence Ho.

Macau observers say the aggressive deal struck with A-Max has seen the junket operator bring in substantial new volumes of high-rollers to Crown Macau, which has been difficult for its rivals to match.

“There has been a dramatic shift in the market since December,” one Macau veteran said last week.

“Stanley Ho’s junket operators have been struggling. Galaxy has been losing market share as well.

“It has not been easy for them to find the consolidators who can bring in the same horsepower as A-Max.”

Under the deal, A-Max, a consolidator of junket operators, receives a total commission rate of between 1.2 per cent and 1.35 per cent from Crown.

A-Max in turn pays its junket operators up to 1.2 per cent.

In the past, Macau casino operators would only pay around 1.1 or 1.2 per cent in total to junket operators to bring in high-rolling gamblers to their premises.

Observers say the financial viability of the Crown Macau deal with A-Max, which involves a potentially higher total commission structure, is dependent on A-Max being able to deliver high volumes, which has so far been the case.

Macau gaming turnover continues to increase, with total monthly revenues twice the level of the Las Vegas strip in recent months.

Unlike last year, which saw a flood of new casino openings in Macau, 2008 is not expected to see any substantial new supply come on to the market, giving the existing operators a chance to consolidate their positions.

The past few months have also seen Crown enjoy an increase in its “hold rate”, or house percentage retained, which has also helped the success of its operations. “Crown’s hold rate was terrible,” said one observer.

“It used to be around 2.2 per cent on baccarat, but now it is 2.7 per cent.”

Crown’s success has put pressure on its rivals to increase the commissions paid to junket operators. As Chan notes in his report, the junket operators now have more bargaining power in Macau than the casino operators.

Chan says that Galaxy’s market share has dropped from 14.9 per cent in November to only 10.3 per cent in February.

“Galaxy has extended credits to select junket operators and raised its commission rate to 1.25 per cent, even higher than the 1.2 per cent A-Max is paying junket operators,” he notes.

The new competition from Crown has also prompted Sheldon Adelson’s massive Venetian, which opened in mid-2007, to revise its commission structure, a move which has helped to boost its market share by 2 percentage points to 12 per cent in February. The Venetian’s commission rate is now 1.26 per cent.

Chan predicts that Melco PBL’s earnings before interest, tax and depreciation could reach as high as $US280 million in 2008. “With a total construction cost of about $US570 million, we estimate Crown’s payback period to be only about two years,” he says.

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We are absolutely thrilled to welcome our 10 millionth visitor to The Venetian Macao in less than six month’s time from our opening. We wish the lucky guest an enjoyable and memorable stay with us  said Mark Brown, president of Sands Macao.

On the third day of the Chinese New Year, the Venetian Macao hit a record high of 125,020 visitors through its doors, a company statement said.

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If Macau misses in the 2007 data, it’s only a matter of time before it leaves Las Vegas twinkling in its rearview mirror. Macau already far outearns the famous Las Vegas Strip, even though the Strip has a 50% advantage in the number of both visitors and casinos. Minimum bets in the Chinese territory usually set at HK$100 (US$12.85), compared with a less than US$1 in some Vegas locations, allow Macau to take in far more per customer and per table than Las Vegas.

Three of the biggest names in Las Vegas - Wynn Resorts, Las Vegas Sands (owners of the Venetian), and MGM Grand Macau - have built mammoth properties that would fit right in back in Vegas. But size, whether it’s your square footage or bankroll, isn’t everything.

“We were just in Las Vegas and this isn’t Vegas,” an American engineer living in Taiwan (name withheld by request) says in the midst of the Venetian’s seemingly endless, teeming casino floor. His Chinese wife enthusiastically concurs. “Is there more to it, outside?” she asks, hopefully.

Similarities are different
Those comments highlight danger signs for Macau as it tries to expand its market beyond day-tripping gamblers from mainland China and Hong Kong. Its vast new properties need regional and long-haul guests looking for a broader vacation experience. Ultimately, it’s not Macau’s similarities with Las Vegas but its differences and its skill in emphasizing and exploiting them that will determine its success in attracting those guests. That’s partly because even Macau’s similarities with Las Vegas mask big differences.

For its earliest days, Las Vegas had top stars on its stages (and at its tables and cocktail lounges). Particularly since the 1980s, Vegas hotels expanded from their original desert themes and from the basics to include world-class shopping, gourmet dining, full-scale theater productions, galleries, museums, clubs and more.

Casino resorts in Vegas now earn half of their revenue from non-gambling activities, said Bill Eadington, director of the Institute for the Study of Gambling and Commercial Gaming at University of Nevada, Reno. “Given that Macau is building on the Las Vegas Strip mega-casino model, I expect it will try to follow the same approach,” the economics professor said.

Basically, none of the above evolved in Macau during the 20th century, and there’s skepticism about whether the Las Vegas model would work in Macau. When the Sands Macao opened four years ago, the casino was mobbed and its upscale restaurants empty - they’ve now been removed, in favor of more gaming tables and downmarket eats. Macau’s average stay per visitor and average spending have remained stubbornly steady despite expanded temptations and doubled visitor numbers over the past five years.

“Macau has built properties based on Las Vegas’s 30 years of experience, but the Chinese market doesn’t have any experience with the Vegas product,” Andy Nazarechuk, dean of the University of Nevada Las Vegas-Singapore’s William F. Harrah College of Hotel Administration, said. “Once they learn, there will be money to be made.”

In Macau, the non-casino attractions have barely begun. The Venetian, Macau’s first Las Vegas-scale integrated resort, includes big name shopping in a 200-plus unit mall, Asia’s largest convention venue, and the Venetian Arena, the 15,000 seat arena that’s already hosted The Police, Beyonce, Black Eyed Peas, the Cleveland Cavaliers of US basketball, and Pete Sampras’ victory over Roger Federer in a tennis clash of the ages.

Not ready for prime time?
The Venetian’s international drawing power is broadening Macau’s visitor base, but at this stage that may create more problems than it solves. The curtain has yet to rise on Cirque du Soleil at the Venetian and similar shows at other venues, and a range other entertainment on the drawing boards.

The Venetian Macau is the first property in Cotai, the landfill connecting Macau’s two outer islands that’s planned to be its version of the Las Vegas Strip. Right now, there’s nothing but the Venetian and a lot of construction cranes, steel frames and moved earth. Many guests must get the impression they have been dropped - to pick up the Las Vegas desert metaphor - at the single oasis in a vast wasteland, although they’re just minutes away from a full dose of Macau’s east-meets-west charm.

There’s a different aesthetic at work in Macau than in Las Vegas. Here mainland tourists happily snap photos of the Venetian’s fake European historical buildings rather than photograph the genuine 16th century articles in Macau’s historic center. “We prefer fake things,” a Chinese friend said, noting that Asia is the land of the Rolex and Louis Vuitton knockoff. But in Macau they don’t get the joke on the biggest fake of all.

Las Vegas is the land of the Elvis Presley impersonator, deeply rooted in kitsch back to the early desert motif hotels: The Sahara, The Aladdin, The Sands, and celebrating the high priestess of American tropical tackiness, The Flamingo. The next generation progressed from Circus Circus and Caesar’s Palace to kitsch on steroids with scale models of the Sphinx, the Eiffel Tower, New York skyline, and Venice. Even though operators like Steve Wynn have brought modern masters’ art, Michelin star chefs, and designer labels to Vegas, the socio-cultural baseline remains Elvis’s peanut butter, bacon and banana sandwich. There may be serious money and serious events there, but no one takes Vegas seriously.

Macau’s copies of Vegas imitations are not presented as punchlines of an elaborate joke but as genuine luxury articles. Singapore, which is building up its own nest of casinos, recognized the danger. It insisted that the proposals for its two casino resorts be original designs and specifically prohibited imitations of other destinations.

Runway fashion
The Venetian Macao is undeniably a marvel. The world’s second-largest building (behind Boeing’s plant for assembling 747s), built to suck through 100,000-plus visitors daily and leave them fractionally poorer while treating them to gondoliers paddling through indoor canals, handpainted frescoes on the ceilings, and the chance to walk away as millionaires, or at least live for a while as if they were.

But the Venetian shares less with an exclusive resort destination than it does with an airport, right down the Samsonite and See’s Candies outlets. Parts of the Venetian (just like the platinum lounges at airports) are sumptuous but overall it feels overwhelming and isolated. Once inside the Venetian, it seems impossible to get out. It also seems as if there’s nowhere to go, exactly the way management wants it. Yet the Venetian is within walking distance of Taipa Village, one of the most engaging sections of Macau, embodying its 500-year legacy of Chinese and European cultures.

Instead of its fakes, no matter how fabulous, Macau should be promoting its real heritage as a crossroads between east and west in a relaxed setting more like southern Europe than southern China. Putting the spotlight on that heritage would spread spending beyond the casino resort fortresses to keep homegrown businesses happy.

More importantly, it would differentiate Macau among destinations as gaming spreads in the region. Within two years, Singapore will have a casino resort by the creators of the Venetian in a unique high-rise package, and another by Malaysia’s Genting/Star Cruises on a beach resort island featuring a Universal Studios theme park. Malaysia, Cambodia and South Korea already have casino resorts, as does Australia. (Like Vegas, all are particularly friendly to Chinese players.) Vietnam, Thailand and Japan are seriously considering getting into the business.

What will set Macau apart aren’t gambling and Vegas imitations, but its unique Mediter-Asian heritage. Macau’s real success, big enough to justify the billions invested, won’t be Asia’s Las Vegas but as the world’s only Macau.

Former broadcast news producer Muhammad Cohen is special correspondent for Macau Business and author of Hong Kong On Air (www.hongkongonair.com), a novel set during the 1997 handover about television news, love, betrayal, high finance and cheap lingerie.

Reprinted with permission :: Asia Times Online

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Tickets are on sale from today and prices range from 800 to 2,500 patacas (US$100 - 325), check here for tickets :: Celine Dion in Macau.

After completing a four-year nightly performance in a five-star theatrical show at Caesars Palace, in Las Vegas in December last year, Celine launches her “Taking Chances World Tour” this month, hitting South Africa, Japan, Macau, Korea, Australia, Shanghai, Beijing, Europe, Canada and USA.

“Celine Dion is truly a legendary vocal artist in pop music history and the Venetian Macao is proud to bring her to Macau where her remarkable talents can be enjoyed by residents and visitors alike. I have no doubt that the people of Macau will share in the excitement of having this international super star perform her world-class act in our city. Stars of this caliber are rare but we aim to bring more and more of these top class performers to Macau,” said Mark Brown, president of Sands Macao and The Venetian Macao-Resort Hotel.

Her major international breakthrough was achieved with her song “Beauty and the Beast” in 1992, for which she was recognized with an Academy Award (Oscar) for best original song, and this was soon followed with Grammy Awards in the USA and World Music Awards in Europe. Another song with which Celine is closely associated is the unforgettable “My Heart Will Go On”, which has also brought her numerous awards and which smashed many records in the history of the music industry.

Celine performed at Hong Kong Kai Tak in 1999 and this tour in Macao marks her return to China after nine years.

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The new 24-story hotel is situated next to casino Sands Macao, which opened in 2004. The hotel adds 289 suites, seven restaurants, a heated rooftop swimming pool and a 660-seat theater to the 800 table games and 1500 slot machines in the casino.

The Sands Macao Hotel will be the second casino hotel opened by the chairman of Las Vegas Sands, American billionaire Sheldon Adelson, who hopes to transform Macau into a top vacation spot.

The casino operator opened its massive new casino and hotel resort The Venetian Macao last month in the former Portuguese colony, which returned to Chinese rule in 1999.

“We are now uniquely positioned in Macao to offer all the integrated amenities necessary as a destination to attract a diverse range of multi-night visitors,” said Mark Brown, president of Sands Macao and the Venetian Macau Resort Hotel.

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“We are delighted to be bringing The Venetian Festival to Macao, and to share with local Macau residents as well as the many international visitors to our property some of that city’s defining foods and products,” said Mr. Mark Brown, President of Sands Macao and the Venetian Macao Resort Hotel. “All the special offerings here at The Venetian are part of our towering tribute to Venice, a city renowned for its architectural splendour, canals where gondoliers serenade romantic couples, some of the finest masterpieces of Western art, and a city which is almost legendary for its exquisite beauty. Visitors will be delighted at every turn by the great artistic achievements for which Venice is justly famous, so that they can experience the romance and revelry of that famed Italian city here in Macau.”

The Venetian Festival will showcase a series of cultural activities, many of which are the very essence of Venice and Veneto, including the production of artistic glass, the making of gondolas, and, of course, the culinary delights of Venetian food and wine.

The production of artistic glass features one of the most revolutionary inventions in glassmaking technology - glassblowing - the discovery of which can be traced back to the 1st century BC, and which is found in Roman and Islamic glasswork but was perfected in Venice, on the island of Murano, now the centre of this craft, creating glasswork in marvelous shapes and an astonishing array of colours.

The gondola is the typical black wooden boat used in Venice for the transportation of people along its many canals. The distinctive shape of the gondola is a soaring hull, flat bottom and elevated points, finished in gold. Gondola builders construct both the hull and the main body of the vessel from special woods found only in the mountains of Veneto.

Veneto is no less famous for its wine, and is now one of the main producers in Italy and in Europe. Venetian wine uses a variety of indigenous grapes unique to the region, many of which are increasingly appreciated by leading vintners around the world.

“We are thrilled to be bringing Venice and Veneto to Macau, to share with local people and tourists many of the products and artefacts for which Venice and Veneto are rightly famous,” said Mr. Walter Brunello, Regional Minister for Agriculture and Tourism of the Veneto. “The Venetian Macao is itself an extraordinary celebration of Venice, with so many buildings beautifully reproduced, with bridges and canals, and by promoting our culture here, in Macau, we hope that more people will want to come to Venice to see it for themselves.”

During The Venetian Festival, there will be a series of events to celebrate the art and culture of Venice, including glass blowing, gondola-building workshops, cooking demonstrations and wine tasting. All these events are scheduled from noon until late in the evening, on October 7, October 12-14, 19-21. Visitors can also take part in the “Be A Venetian” Promotion for the chance to win prizes in an instant draw.

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American billionaire Sheldon Adelson and his wife Miriam inaugurated the $2.4 billion Venetian Macao Resort Hotel on Cotai by smashing a bottle of champagne against a gondola, which will float down one of three indoor canals, compared with only one at the Venetian in Las Vegas.

Casinos like the Wynn and Adelson’s Sands have led this small city in southern China past the Las Vegas Strip as the world’s most lucrative gambling center.

Las Vegas Sands Corp. Chairman Adelson wants to take it a step further with the 10.5 million square foot Venetian.

Hundreds of visitor streamed under the golden dome just inside the entrance Tuesday, treading on thick champagne colored carpet and taking in the fresco paintings on the wall.

Adelson hopes the complex will transform Macau from a gambling pit stop for Chinese tourists to a vacation and business convention destination, where visitors shop, watch shows _ and roll the dice.

‘Today is the beginning of what has been a dream of mine for some time _ to reproduce the capital of entertainment in Asia for Asians,’ Adelson said Tuesday at a news conference.

Macau’s casinos are currently scattered across the territory, a peninsula connected to mainland China and two outlying islands by a reclaimed strip of land called Cotai.

Adelson said his Venetian Macao Resort Hotel on Cotai is the cornerstone of what will become a concentrated resort area he calls the Cotai Strip.

Las Vegas Sands claims the 10.5 million square foot Venetian _ twice the size of the Las Vegas original _ is the largest building in Asia and the second largest in the world. Boeing Co. claims it has the world’s largest building _ a plant in Washington state.

The Venetian boasts what it claims to be the world’s largest gaming space of 550,000 square feet, housing 3,400 slot machines _ with room to expand to 6,000 _ and more than 800 gambling tables.

It has 3,000 rooms, a 15,000-seat sports arena, retail space for 350 stores, 1.2 million square feet of convention space, fine dining and a Cirque du Soleil-produced show.

Its decor is Venice inspired _ with a Chinese touch. Chinese-style sampans as well as gondolas will sail down canals. The resort also features a replica of Venice’s St. Mark’s Square.

Adelson also plans to open more hotels under brands such as Four Seasons, Sheraton and St. Regis. In all, his Las Vegas Sands Corp., which also runs the Sands Macao on the Macau peninsula, plans to invest up to $12 billion and build 20,000 hotel rooms on the Cotai Strip by 2010.

Some analysts say Adelson is smart in trying to lure new tourists to Macau. The convention business _ a specialty of the Las Vegas Sands _ is a lucrative one, they say.

‘The Venetian will get new customers who are right now not going to Macau at all,’ analyst Billy Ng at JPMorgan Securities said.

Las Vegas Sands President William Weidner said 44 major conventions have already been scheduled at the Venetian over the next two years.

He also said he expects the Venetian Macao to lengthen the average guest stay to three to four days, from 1.2 days in other Macau hotels.

But it may take time to make Macau a major tourist destination.

Rob Hart at Morgan Stanley said Macau will never be Las Vegas.

‘It’s going to be slow transition … it’s never going to happen to the same extent,’ Hart said.

Source : topix.com

Casino Operations Management

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Instead, MGM Mirage Inc. and Wynn Resorts Ltd. are pouring money into Macao, a tiny peninsula on the southeastern tip of China.

And while the Las Vegas Sands Corp. is spending $600 million on Bethworks Casino in Bethlehem, Pa., it’s plunking down $12 billion in Macao.

Five years ago, Macao was a seedy backwater town about one-eighth the area of Philadelphia, with just one casino operator.

Today, it’s the world’s most lucrative gambling mecca, with nearly $7 billion in revenue last year, compared with Las Vegas’ $6.7 billion.

Macao will reach another milestone Aug. 28, when the Las Vegas Sands opens the world’s biggest casino here. The Venetian Macao Resort-Hotel Casino, with 546,000 square feet of casino space, will be three times the size of Las Vegas’ largest, the MGM Grand, and Atlantic City’s biggest, the Borgata.

“This is the new frontier,” said Ray Dougherty,a native of West Philadelphia, who is the director of casino operations for the Venetian Macao.

“There’s no doubt. This is the mother lode.”

But behind the glittering construction, Macao is reeling from overpopulation, traffic congestion, a crumbling infrastructure of roads, bridges and ferry terminals - and a total dislocation of its labor market.

And there is growing concern among the Chinese - Macao’s primary clientele - about gambling addiction.

As the only legal gambling venue in China, Macao is within a five-hour flight for three billion people, and in the midst of a soaring economy. Thousands of day-trippers crowd buses for the 45-minute ride from Zhuhai in Guangdong Province to Macao’s border.

Gambling is entrenched in the culture, with little stigma, explained advertising agency executive Tom Doctoroff, who has lived in Hong Kong and China for 13 years.

“It’s a conspicuous demonstration of freedom and making it to the top.”

The transformation
Macao’s transformation began eight years ago, when Portugal, after four centuries of rule, returned Macao to China as a Special Administrative Region - making it largely independent, except for foreign policy and defense - just like nearby Hong Kong, 50 air miles up the South China coast.

In short order, the government ended the gambling monopoly that billionaire Stanley Ho had held for 40 years and swung open the doors to competition, and to tourism, especially from southern China.

When the first American-owned casino, the Sands Macao, opened on May 18, 2004, additional police had to be called to handle the surging crowd. An escalator buckled and went into reverse with the crush of people trying to get to the gaming floor. (There were no injuries.)

As was typical of Macao casinos at the time, the Sands Macao was built without hotel rooms. The culture of gambling in China is simply to gamble - and gamble big - not to make a vacation of it.

“Here we have people betting on the floor between $5,000 and $10,000 U.S. dollars a hand, and it’s just like somebody back home in Atlantic City playing $10 on the floor,” said Mark Brown, who became president of Sands Macao and Venetian Macao after 19 years in key jobs at Donald Trump’s Atlantic City casinos.

“Nobody eats, nobody drinks, nobody stays overnight here,” said Brown, who brought a half-dozen Trump executives with him from Atlantic City. “They just gamble, and they leave.”

Even so, within eight months, the Sands Macao generated $400 million - about what the casino cost to build - in revenue.

Then last September, gambling mogul Steve Wynn became the first to test whether Macao could become a Las Vegas-style casino resort and attract people from all over Asia with retail malls, fine restaurants and spas.

So Wynn built posh hotel rooms - 600 of them - and a high-end retail mall with Macao’s first Louis Vuitton shop at his Wynn Macao. The resort features a lake with fountains that perform a musical water ballet each night, and a mega-casino with white marble floors and stunning chandeliers.

China, flush with new millionaires, has proved him right. His rooms, which cost $311 a night, are largely full. And in the latest quarter, Wynn Macao’s revenue jumped 23 percent to $335.2 million - nearly half of it from the new non-gambling amenities.

Going up next door is the $1 billion MGM Grand Macao - a giant ocean wave in three shades of gold. Opening this fall with 600 hotel rooms, it features an atrium four times the size of the Bellagio’s in Las Vegas.

Not to be outdone, longtime Macao gambling czar Stanley Ho in February opened the gaming floor of the $640 million Grand Lisboa Casino. Its companion hotel is nearing completion. When it’s finished, the complex will resemble a gigantic Faberge’ egg from which the hotel, with 295 rooms, shoots up like a large lotus flower.

More extravaganzas are planned for Macao’s new Cotai Strip. The Venetian, with three canals (the Las Vegas Venetian has just one), will be the first “integrated resort” to open on this wetland reclaimed from the sea, with a major convention center and entertainment hall.

“We are reproducing the Las Vegas Strip,” said billionaire Sheldon Adelson, chairman and chief executive officer of Las Vegas Sands, in an interview.

“Now all of our competitors are trying to get in here,” he said. “In the beginning, they all trashed it.”

Explosive growth
With 20,000 hotel rooms, the largest theater in Asia, and a ballroom for 7,000, the Venetian, many say, will be to Macao what the Mirage was to Las Vegas and the Borgata to Atlantic City.

It will redefine the city - though some say for the worse.

For the Venetian to succeed, gambling experts say, the number of daily visitors to Macao will need to jump from 45,000 to 80,000.

“The rapid growth in the past year of the casino industry has brought in foreign direct investment,” said Davis Fong, director of the Institute for the Study of Commercial Gaming at the University of Macao. “At the same time, we are suffering some of these negative impacts.”

While nearly 52,500 people work in the casinos here, a tapped-out local labor force of 250,000 has left too few workers for Macao’s schools, hospitals and restaurants.

“It’s really difficult to get help,” said Hon Wing Hau, who alone runs a fruit stand in the shadow of the Sands Macao. “Young people all want 16,000 patacas [$2,000] a month because that’s what they can get at a casino. I can’t compete with that.”

Labor experts estimate that Macao’s new casinos will create 20,000 to 100,000 jobs over the next 10 years - if employees can be found.

Macao, with a population of only 457,000, must now compete with Malaysia, Singapore, Cambodia, South Korea and the Philippines for casino staff. Taiwan and Thailand are considering legalizing gambling; Japan will vote next year.

Many residents of Macao “are dropping out of school,” said Christopher McNally, a China expert at the East-West Center in Honolulu, who teaches in Macao. “They aren’t finishing their MBA degrees because it makes much more sense to go into a casino and be a dealer.”

The lure of gambling is also changing the lives of some who frequent the casinos to try their luck/.

Every day, 60-year-old Kelvin Leung is among the masses who ride the bus from Zhuhai, in Guangdong Province, to the Macao border. There he boards a second bus into Macao, then a shuttle bus to one of Stanley Ho’s casinos, something he has been doing since 1974.

On one of his treks last spring, he talked about his losses.

He said that, in the 1970s - at the peak of his gambling addiction - he lost about $200,000, money from an inheritance and the sale of a property he owned in Hong Kong. He dropped it at the old Casino Lisboa, still known for its smoke-filled gambling dens and lobby teeming with prostitutes - a throwback to Macao’s old gambling days.

Leung, now a regular at Ho’s new Grand Lisboa, said his family cut off all contact with him in 2003 because he was constantly borrowing money to gamble.

“It’s cost me my life,” he said. He doesn’t even know whether his mother is still alive. “I’m all alone.”

So concerned is the Chinese government about gambling addiction and illegal workers that in May it made it more complicated for residents of Guangdong Province to get visas.

Women, such as Sandra Law, 50, a mother of three from Hong Kong, now make up 40 percent of Macao’s gamblers, up from 10 percent a few years ago.

“A lot of my friends have lost their jobs and their savings here already,” Law said as she tried a slot machine at Wynn Macao. “I’m afraid that gambling is too popular and will change our lives.”

China eased the visa restrictions last week; the rule was hurting business travel - but not gambling.

The restrictions didn’t affect Leung at all; he has a Hong Kong ID card and a permanent business passport. “I still go to Macao every day,” he said last week.

The road ahead
The really high rollers - the casino companies - are confident that Macao’s growing pains will be short-lived, and that the boom will continue.

“I don’t see any end in sight over there,” said MGM Mirage chairman and CEO Terry Lanni.

A new ferry terminal will open next year, funded in part by Macao’s 40 percent tax on gross gambling revenue - far higher than Las Vegas’ (6.75 percent) or Atlantic City’s (9.25 percent).

In fact, about 70 percent of Macao’s budget derives from the tax. Macao’s top government official, Edmund Ho, has pledged his support to the casino industry.

A 21.8-mile bridge is being built to connect Hong Kong, Macao and South China. Border terminals are being upgraded, and Macao International Airport is expanding. A high-speed rail line will be completed in three years.

“This really speaks to the strength of Macao,” said Harvey Perkins, senior vice president of Spectrum Gaming Group, a casino consulting company in Northfield, N.J.

On its own, Las Vegas Sands is buying 10 ferries at $15 million each, 100 luxury buses, and a fleet of airplanes, limousines and expensive cars, including a Rolls-Royce Phantom and Bentley Arnage 728, so its VIP guests can get to the Venetian with ease.

Sands CEO Adelson, named the third-richest American by Forbes magazine last year, has no doubts.

“I’m 100 percent confident it’s going to win,” Adelson said. “How can you lose?

“You can’t.”

Dougherty has no intentions of moving back to Philadelphia, though his parents and siblings live in the city, and he occasionally craves a Philly cheesesteak.

Asia, where he has worked in casinos for a dozen years, is now home.

“Those of us who have been out here awhile, we knew the Asian market was going to explode,” Dougherty said as he surveyed the Sands Macao casino floor, teeming with gamblers, on a recent weeknight.

“It was just a matter of when.”

Courtesy: the Philly

• The Venetain Macao Draws Over 2.5 Million Visitors in Just Six Weeks
• Wynn to Build Most Beautiful Hotel on Earth on The Cotai Strip
• Sands Macao Revenue Up 39%
• Macau Gaming Q-1 Revenue Jumps Up 45%
• Macau Casino Tussle Starting to Heat Up

In a conference call with reporters Thursday, William Weidner, president of Las Vegas Sands Corp., said the 3,000-suite casino complex set to open Aug. 28 would help change a gambling den for day-trippers into an elegant resort destination.

“Vegas was really kind of a dusty railway stop from the ’30s into the ’40s,” he said. “It’s like truncating the 76 years of development of Las Vegas into one place under one roof.”

The $2.4 billion (EUR1.8 billion) property is the second for Las Vegas Sands in Macau, after it opened the Sands Macao there in May 2004.

But it is the first of several hotel-casinos the company is developing with partners on what it calls the Cotai Strip, an area of reclaimed land in Macau meant to mimic the heart of the Las Vegas Strip at the footstep of populous Guangdong Province.

The company says The Venetian Macao will have fine restaurants, dazzling shows, luxury shops and 1.2 million square feet (110,000 square meters) of convention space, nearly twice that in all of Hong Kong.

The Sands also is set to open the 400-room Four Seasons next door by the end of the first quarter, followed by hotels under the Sheraton, Shangri-La, St. Regis and Traders brands later next year, Weidner said. Likely in 2009, the company also plans to open hotels under the Hilton, Conrad, Raffles and Fairmont brands.

In all, the company plans to invest up to $12 billion (EUR9 billion) and build 20,000 hotel rooms. All of the properties are being constructed and owned by Las Vegas Sands, with the hotels run under management contracts by the brands.

“The Venetian represents that first massive step in changing Macau from primarily a day-trip market focused on Hong Kong and Guangdong Province to a full-fledged international, multi-day, multifaceted destination resort,” Weidner said.

Other operators also are plowing billions of dollars into casinos in what used to be a seedy den for hard-core gamblers, but which has overtaken the Las Vegas Strip as the world’s most lucrative casino hub. Wynn Resorts Ltd. opened the $1.1 billion (EUR820 million) Wynn Macau last September and MGM Mirage Inc. is set to open its $1.1 billion (EUR820 million) joint venture, the MGM Grand Macau, later this year.

Some analysts have taken a wait-and-see attitude on whether the Las Vegas model of entertainment, dining, shopping and hotels will work in Macau, which had been dominated by gamblers who go for a single purpose and leave the same day.

Weidner said rooms for the first two days of the resort’s opening are expected to be booked to capacity. He said 44 major conventions are scheduled to take place there for the next two years, with convention business expected to fill about one-third of its rooms.

Another third or more of the rooms are expected to be filled by vacationers and about a fifth or more by high-rolling gamblers, who have accounted for much of the Sands’ profit in Macau to date.

“It’s exactly the same business plan that we executed in Las Vegas, repeated in Macau,” Weidner said.

Some observers have said the opening of the massive resort, the largest in Asia, will temporarily draw visitors away from other casinos. Weidner said the company even expected its Sands Macao property to be affected, but it hoped to offset that by opening 380 new suites there in September.

Weidner said the casino boom in Macau will not likely hurt revenues in Las Vegas, where it plans to open the $2.6 billion (EUR1.9 billion) Palazzo resort in December. The company relies on Asians for most of its high-roller business, but growth in Macau is unlikely to sate their appetite for visiting the U.S., he said.

“It’ll never match the critical mass in Las Vegas,” he said. “You’ll have certainly a much better product there in Macau and we’ll do extraordinarily well, but I don’t think it’ll affect Las Vegas at all. It won’t even hiccup.”

Source : International Herald Tribune

• Sands Macao Revenue Up 39%
• Venetian Macau to Soft Open on August 28, 2007
• Future Macau Hotels from Hilton
• Venetian Macao Opens With Gondola Champagne Bottle Crash
• Sands Profits Now, Plans for Future