It has been estimated that 50 new casinos will be built in Asia over the next six years at a total cost of $50 billion-$60 billion. The target market, of course, is China, where gambling remains illegal, but where the increasingly prosperous 1.3 billion population is known to enjoy a bet or two. The principal beneficiary of this construction boom is Macau, the slightly raffish former Portuguese colony on the South China Sea.
Macau legalised gambling as long ago as 1847 and since has taken a fairly laissez-faire attitude toward the prostitution, loan-sharking and gangsterism that thrives in the territory along with the croupiers.
Few other Asian countries permit gaming of any sort. Malaysia has just one licensed casino, while Singapore is about to start construction on its first. In Hong Kong, betting on the horses and mah-jong is legal, but gaming is not. It's long been rumoured that Thailand will, some day, grant casino licenses to a small number of hotels in the resort of Pattaya, largely to stem the flow of its citizens - and their cash - to the illegal gambling dens in the lawless Cambodian border towns. But that day has been a long time coming.
So, for now, Macau is the only game in town. The Chinese peninsular city sits within a five-hour flight of nearly 3 billion people (Las Vegas, by contrast, is the same distance from only 450 million people). It is now the fastest-growing casino market in the world, with gambling revenues rising by as much as 40% a year and visitor numbers rocketing from 7.5 million in 1999 to 16.7 million in 2004, and reaching an estimated 20 million in 2005.
The stakes in the game to control Macau's gambling market are high and pit local Chinese interests against well-financed interlopers from Las Vegas. In the Chinese corner sits casino tycoon Stanley Ho and his Sociedade do Jugos de Macau (SJM, or Macau Gaming Society). His principal opponent is Sheldon Adelson, the billionaire owner of the Las Vegas Sands Corp, which runs the Sands resort in Nevada.
Until recently, the 82-year-old Ho and SJM enjoyed a monopoly on all gambling in Macau. The licence, granted by the Portuguese in 1962, has enabled the tall, saturnine Eurasian to build up a sprawling empire comprising casinos, hotels, retail outlets and the Hong Kong-Macau jetfoil operation.
His holding company, Sociedade de Turismo e Diversoes de Macau, accounts for two-thirds of the city's GDP.
Often described as 'colourful', Ho reputedly made his first fortune out of smuggling and trading when Macau was a neutral Portuguese enclave in Japanese-occupied southern China during the Second World War. His gambling operations have been persistently linked with triad gangs, which, allegedly, offer loan-sharking, prostitution and other services in the corridors of his hotels and casinos.
His activities, and particularly the sprawling family he has spawned from four wives, are a continual focus of magazine and gossip coverage, both in Macau and neighbouring Hong Kong, where his master company, the Shun Tak group, is listed. Nonetheless, Ho has done rather well out of his 40-year monopoly. In 2003, his 12 small, shabby casinos generated $3.5 billion in gambling revenues; by contrast, the 44 swanky resorts on the Strip in Las Vegas took $4.8 billion.
But in 1999, when Macau became a Special Administrative Region of China (SAR - the same status as Hong Kong), the authorities cracked down on the warring triad gangs, whose activities had downgraded the city's reputation from seedily interesting to dangerous. In 2002 they ended Ho's monopoly and awarded two new gambling licences - one to Las Vegas magnate Steve Wynn, who owns the Wynn resorts chain, and the other to Galaxy, a Hong Kong-based construction group that later did a deal with Adelson's Sands Corp.
Two years later, the first of a new generation of American-style casinos opened on Macau's waterfront, bringing real competition to Ho's down-at-heel gambling dens. The 71-year-old Adelson's Sands Macau is a $265 million, bronze-tinted, modernistic tribute to Las Vegas excess, with 165,000 square feet of casino space, a buffet and steak house, free booze (which the Chinese punters generally ignore in favour of tea), entertainers clad in gold-trimmed lion costumes and ceremonial dancers crashing cymbals and gongs.
When it opened, it was assailed by crowds attracted by rumours that it was handing out free gaming chips (it wasn't). Even so, the 300-odd gaming tables and 500 slot machines (which the Chinese call, appropriately, 'hungry tigers') turned over almost $36 million in the first 10 weeks. Adelson has boasted that its first year revenues will generate enough profit to enable him to recoup the entire $265 million investment.
Now Adelson is doubling down. His plans for Macau include a $6 billion mini replica of Las Vegas's famous Strip, to be built along a man-made ribbon of land linking Macau's two islands, Taipa and Coloane. The appropriately named Cotai Strip is now a construction site, where seven new hotel-casinos, a mega-mall and a cavernous convention centre are rising. Sands Corp will own one site and run the casinos in the other, giving Adelson a major lock on Macau's gambling industry.
Adelson's other major project is the Venetian Macau, slated to open later this year. A super-scale version of his Las Vegas Venetian, it will boast the largest casino in the world (600,000 square feet - about five times the average in Las Vegas), 3,000 hotel suites, numerous swimming pools, 850,000 square feet of shopping, a 15,000 seat showroom, a 1.2 million square foot convention centre, as well as the usual canals, gondola rides and high-end restaurants.
Reportedly the 11th richest person in the US - and 19th in the world - Adelson made his money in the 1980s with Comdex, the computer industry's premier trade show. When he cashed out in 1995, selling his exhibition business to Japan's Softbank for $862 million in cash, he turned his attention to Las Vegas's resort industry, buying the money-losing Sands hotel and razing it to build the Venetian mega-resort.
Ignoring Las Vegas tradition, which decrees that all guests should get hopelessly lost in the casino on their way from reception to their hotel rooms, Adelson tailored his luxury hotel to business travellers and conventioneers.
He gave them faxes and mini-bars, internet access, name retailers, spas, celebrity chef restaurants and $50 gondola rides. His instincts were right: the Venetian now has the highest occupancy (98.3%) and the highest average daily room rate ($219) on the Strip, and its casino is the second most profitable on the Strip.
In 1994, Adelson met Wynn, who then owned the Las Vegas Mirage. The encounter did not go well. Whatever the subject of the meeting (Adelson says it was about the noise coming from the fake volcano in front of the Mirage; Wynn describes it as a spat over the price for ballroom space in the hotel), it ended with Wynn chasing Adelson out of his office. Since then the two men have been arch enemies, communicating principally through insults and threats in the press, which makes it all the more interesting that Wynn is now working with Ho.
For Ho has not exactly been lying down and waiting for the bulldozers from Las Vegas to roll over him. Far from it: as he said in a recent interview: "We are Chinese and we will not be disgraced. We will not lose to the intruders." He recently opened the glittering Golden Dragon casino and revamped another as Greek Mythology, aiming both squarely at the Macau Sands market. And he has invested $250 million in the Grand Lisboa, now under contruction near his flagship Lisboa hotel/casino.
More dangerously for Adelson, in November last year Ho joined forces with Publishing & Broadcasting (PBL), an Australian media and entertainment company controlled by the Packer family, in a joint venture casino deal.
Ho's company, Melco International Development, whose MD is his son, Lawrence, and PBL then paid Wynn $900 million to buy casino rights in Macau. The two companies are now building a large-scale resort on the Cotai Strip.
For his part, Wynn is betting on his new resort-casino, the Wynn Macau, which opens in September this year. Budgeted at $705 million - making up the bulk of a reported $1.2 billion that Wynn has earmarked for investment in the city - his namesake hotel is designed to bring "sophistication and elegance to this blossoming Asian gaming Mecca".
Sited across the street from Ho's Lisboa on a man-made lake that will feature a water fountain show set to music, the first phase of the project will include 600 rooms, a number of five-star restaurants, a ballroom, 28,000 sq feet of retail space, entertainment areas, a spa, a salon and a 100,000 sq foot casino.
Unlike Adelson, who has gone for the day-tripper gambling crowd, Wynn is aiming squarely at high-rollers. And to a large extent, that's what the real prize is here. The average visitor to Macau gambles a gratifying amount, arguably making the city the largest gambling centre in the world.
According to some estimates, house winnings at Macau's 19 casinos (the new ones plus Ho's 12 older establishments) last year exceeded $6 billion, more than the total from Las Vegas's 200-plus gambling joints. Other revenue estimates suggest that Macau hasn't overtaken Las Vegas yet, but will this year.
The reason for this is that the visitors who come to Macau are serious punters. In Las Vegas, most visitors are content to play the video slot machines, which are programmed to pay out only so much every so often.
In Macau, they prefer table games such as baccarat so they can battle the house head-on. In consequence, while Adelson's Las Vegas Venetian has 2,000 video slots and about 120 tables, the Sands in Macau has 360 tables in the centre of the casino, with just 850 slots tucked into a corner.
And when the Chinese play, they play fast. They insist that decks of cards come to the table pre-shuffled, so that more hands can be squeezed into an hour. On average, Chinese gamblers bet $85 a hand versus $25 in Las Vegas. The table minimums are higher too: in Vegas, you can find blackjack games with a $1 minimum (real cheapskates can even find 5 cent tables in the low-low-roller places); in Macau, the betting starts at HK$100 (US$12) - and those tables are rare. It's no surprise, therefore, that Macau's average daily take per table is about $18,000 - more than five times the average for Vegas.
But the real action isn't even at the HK$3,000 blackjack tables. It's upstairs in the VIP rooms that cater for high-rollers. These high-stakes gamblers account for an extraordinary 80% of Macau's gaming revenue and are at the moment the preserve of Ho, who organises helicopter flights into Macau from Hong Kong for his favourite big-spenders. They are chauffeured to discreet, private salons where they can play high-stakes baccarat away from hoi-polloi in the crowded neon-swathed gambling dens on the ground floor.
Casino managers worldwide both know and cater to high-rollers. In Las Vegas an elaborate system of 'comps' - a word derived from complimentary and meaning a sort of tipping in reverse - separates the big-spenders from the ordinary day-trippers. A known high-roller in Vegas will receive free accommodation, probably in a suite, free meals and free drinks (known as RBFs, room-food-drink). In many cases, the casino will throw in a free first-class return ticket to Vegas, as well.
Above even the RBF crowd, though, are what are known as 'whales'. They are the hyper-gamblers, with a net worth in the hundreds of millions of dollars and credit lines in Vegas of at least $2 million. For whales, casinos will do anything. They will send a private jet to pick them up anywhere in the world. They are put up in villas or penthouse suites the size of a mansion; they will have private butlers and a cook. Tickets to the best shows in Vegas will be available for any night, free of charge.
The casinos in Las Vegas that compete for the whale market have invested millions in providing the best, most luxurious - if not always the most tasteful - accommodation for them and their families. And they also provide private gambling salons hidden away from the crowds for the whales to play in. There are only about 200 whales in the world - the late Kerry Packer was perhaps the best known. But what is interesting is that roughly 90% of the rest are discreet Chinese-Asian billionaires with a marked aversion to seeing their names in the press. And most live in Asia.
In the past, Macau couldn't really compete for the whale market. Ho had his helicopter flights, but that hardly compared with a private jet to Vegas. And while Ho provided private gambling salons, Vegas provided chauffeured limousines, butlers and cooks. Vegas has spas, swimming pools, convention centres, golf courses, luxury retail outlets and high-end restaurants.
In Macau, there's a unique Portuguese-Chinese fusion cuisine, but that's about it. And in Vegas, of course, you can see Elton John or Celine Dion, or just about any other headline act. A chanteuse in Macau singing the local hits probably doesn't compare.
All that is about to change. The spas, swimming pools, conventions centres, luxury retail outlets and high-end restaurants are being built. The casinos and hotels are going up.
The 51 suites at the Sands are all reserved for high-rollers. And Steve Wynn is promising world-class entertainment when his Wynn Macau opens in September (although he has yet to announce who it will be).
There is little question that Macau will soon be able to attract the whales, and their losses will swell the coffers of the casino owners.
For this reason, Marc Falcone, an analyst at Deutsche Bank, calls Macau "without question one of the best gaming opportunities in the world and maybe one of the biggest business opportunities in the world".
So what's ahead for Macau? The quaint little ex-colony is certainly on track to become a premier tourist destination, as well as a cash cow of unimaginable scale. But this will almost certainly come at the price of its unique Portuguese-Chinese culture and its laid-back charm. For more than 300 years, it has persevered as a sleepy, overlooked backwater, outshone by the brasher, more entrepreneurial city-state across the bay, Hong Kong.
Now it's being reborn as the Las Vegas of Asia.
As Paulo Azevedo, founder of Macau Business magazine, says, the boom will "bring a lot of changes; let's see if Macau is ready to cope".
LAS VEGAS AND MACAU COMPARED (2003) Las Vegas Macau Visitor numbers (annum) 35.9m 11.9m (87% from the US) (94% from greater China) Hotel occupancy rate 92.5% 64.3% Average length of stay (days) 4.5 1.2 Daily per capita spend $89 $163 Non-gaming revenues (as % of total spend) 50 3 Revenue from slot machines 60% 3% Daily take from VIP table n/a $40,000 Source: InsiderVLV.com, Direccao dos Servicos de Estatistica e Censos (DSEC).