By DAVID BARBOZA
Published: September 11, 2005
IT is 3 a.m. on a humid Sunday in Macao in late July, and hundreds of people, most of them Chinese, are still filing into the gigantic new Sands Macao hotel and casino, making their way up the escalator to the building's main gallery.
Under a 100,000-pound chandelier, on a carpeted floor nearly three times the size of a football field, people stand shoulder to shoulder around the baccarat tables, gambling the hours away.
Across the Avenida de Amizade, a sprawling theme park called Fisherman's Wharf is going up; the neon lights from the Sands illuminate such park features as an artificial 130-foot volcano that rises above a replica of the Roman Colosseum. Just a few blocks away, construction has begun on the Las Vegas tycoon Steve Wynn's $700 million hotel and casino project, the Wynn Macao, which is scheduled to open in 2006. In addition, Macao is awaiting the opening of a MGM Grand Paradise hotel and casino, and Stanley Ho, whose name has long been synonymous with gambling in Macao, is trying to update his own casino empire by building the Grand Lisboa on the Avenida Infante D. Henrique.
Perhaps the most stunning building projects are going on about four miles away, on what is called the Cotai Strip, Macao's expensive and hyperambitious answer to the Las Vegas Strip. By 2007, one of the world's largest and most extravagant building complexes, the Venetian Macau hotel and casino, is expected to open.
It's easy to see why Macao, a small island territory 37 miles southwest of Hong Kong, is already being called Asia's Las Vegas. Over the last few years, Las Vegas and Hong Kong entrepreneurs have been promising to transform this tiny former Portuguese colony into the entertainment capital of Asia, full of Vegas style. They have already earmarked billions of dollars to invest in dozens of new hotels, shopping malls, theme parks, convention centers and super- sized casinos. In fact, this year, Macao's casinos could bring in about $6.3 billion by December, and some analysts expect they will surpass the Las Vegas Strip in casino revenues. Such an increase in casino revenues, which were $5.33 billion last year, would represent an increase of nearly 20 percent . "It's the real deal," says Nick Cashmore, an analyst at CLSA Asia-Pacific Markets, which compiled the comparative data.
For decades, Macao was a sleepy Portuguese colony that offered little more than a taste of European architecture in Asia and an array of smoke-filled casinos catering to gamblers from Hong Kong and Taiwan.
But soon after Portugal returned Macao to China in 1999 after nearly 450 years of colonial rule, the territory's 40-year-old gambling monopoly, controlled by Mr. Ho, ended. Bids for new gambling licenses were accepted, and some of Las Vegas's biggest names started planning for a big invasion.
Now Macao is racing to build bridges, tunnels, railways and airports. There are even plans to spend $3.8 billion to build a 17-mile bridge across the Pearl River, connecting Macao and the city of Zhuhai to Hong Kong by the end of the decade, making it possible for visitors to Hong Kong's new Disneyland to also make a quick drive south to the Venetian in Macao.
Last year, a record 16.7 million people visited Macao. This year, tourism officials are forecasting close to 20 million visitors. But there are some problems. Macao has about 10 square miles of land for 470,000 people. And about four square miles of that land was reclaimed from the sea over the past few decades.
Though Macao has some beautiful old neighborhoods -- in fact, in early July, Macao was added to the World Heritage List -- it has found it hard to attract visitors with more than gambling on their agenda. Most people just come for the day, traveling by car or bus from the neighboring Guangdong Province through a tunnel that connects the Chinese mainland to the Macao peninsula. Those who stay overnight tend to skip the few five-star hotels on the island in favor of more modest accommodations.
Las Vegas businessmen, however, are betting that all that is about to change. And no one is betting more than Sheldon G. Adelson, chairman and chief executive of the Las Vegas Sands Corporation. Mr. Adelson has already rounded up some of the world's biggest hoteliers; together with the Sands, they have agreed to spend about $15 billion over the next decade to create a Las Vegas-style strip on a huge parcel of land, most of it reclaimed from the sea.
The creation of the Cotai Strip -- named after the islands Coloane and Taipa -- opens up a second front for gambling and entertainment in Macao, several miles away from the casinos downtown. The Las Vegas Sands Corporation alone plans to invest about $4 billion to build a group of hotels and condominiums on the Cotai Strip centered on the Venetian Macau, which Mr. Adelson says will be one of the world's largest buildings, a 10.5 million-square-foot hotel, casino, shopping mall and entertainment complex.
Mr. Adelson says this is all part of his effort to help transform Macao into a convention and resort destination packed with dazzling hotels, celebrity chef restaurants, casinos, big-time theaters and golf courses.
His confidence comes, in part, from the success of the Sands Macao, which opened in May 2004 at a cost of $265 million. Nearly 30,000 people showed up on the first day, he says, and profits have been so enormous that a year after opening, the Sands has already paid off its loan, he says. Indeed, profits are so fat that the Sands is now adding 200 more gaming tables to its flashy complex, which will make it the world's biggest casino with 600 tables.
"This is a no-brainer," Mr. Adelson said. "If you build it will they come? In my mind, not only will they come, but they'll come in droves."
Mr. Wynn and Kirk Kerkorian -- two other Las Vegas entrepreneurs -- also have ambitious plans for Macao. And Mr. Ho, one of the richest men in Asia, is under pressure to upgrade his casino holdings aggressively in hopes of keeping pace with his new, flashy competitors from Las Vegas. He has hired the French architect Paul Andreu to design the boat-shaped Oceanus, a $780 million office tower, "six-star hotel," casino and entertainment complex that is planned for what is now a Macao ferry terminal. He is also teaming up with Kerry Packer, Australia's richest man, to build a $1 billion City of Dreams along the Cotai Strip. The pair are promising a resort that "will appear to float above a crystal lake" and even feature an "underwater casino."
Mr. Ho and his family of companies have also made a deal to bring the MGM Mirage Company to Macao to open the MGM Grand Paradise casino and hotel. And the Ho companies have plans to build several other huge projects, including a Park Hyatt Hotel and Fisherman's Wharf, the theme park that features replicas of a Tang Dynasty fortress, the Italian Riviera and an "erupting volcano."
Much of the boom, of course, is driven by China's soaring economy, and by the expectation that Macao could draw over 35 million visitors by 2010. Today, largely because the Chinese government has loosened travel restrictions on mainland residents, millions of Chinese are entering Macao, the only place in China where gambling is legal. And they are, for the most part, hard-core gamblers, spending far more in Macao than the average gambler in Las Vegas,. Macao's revenue per table is about $18,000 versus about $2,500 in Las Vegas, according to Aaron Fischer, an analyst at CLSA.
"You rarely see anyone drinking at the table," said one local tourism official. "They only order tea. They don't want to lose focus."
But questions remain about Macao's future. Will old Macao and its Portuguese charm disappear or be swallowed by the tourist onslaught in Asia's new sin city?
Almost certainly, observers say, old Macao will become a quiet backdrop to the main games in town, gambling and entertainment, as the city is transformed into the ultimate playground for the rich and risky at heart.