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Betting on a Far East Vegas

The new, massive Venetian is part of the territory's bid to transform itself into a major entertainment hub.

September 01, 2007|Don Lee | Times Staff Writer

MACAO — Wu Peng hurried out of the ferry terminal here Thursday afternoon, scampered across the bus-jammed street and headed straight for the Venetian Macao, the world's largest casino, which opened this week.

For the next 24 hours, the pharmaceuticals trader from Shenzhen, China, was glued to a baccarat table, like thousands of other Chinese. Wu, 40, had no interest in strolling down the Venetian's mall under its faux blue sky, swimming in the six pools or riding in a gondola.

"I can ride a boat anywhere," he sniffed, plunking down another $75 bet on the table as Thursday turned into Friday.

Wu is the kind of visitor Macao has had for years: They come for a day or so and play nonstop and very hard. Unlike in Las Vegas, the casinos here take in a lot more action in private VIP salons, and gamblers generally don't mix alcohol and cards, preferring instead to drink water, tea or orange juice, served by a few low-key women who push carts.

But now, with the opening of the $2.4-billion Venetian -- and a slew of more American-style casinos and hotels on the way -- this peninsula on the southern tip of China is making a bid to transform itself into a mega resort, a la Las Vegas, with shows, clubs, fine dining and meetings galore.

"The Venetian Macao is the first step," said William P. Weidner, president and chief operating officer of Las Vegas Sands Corp., which built the Venetian Macao and the Venetian on the Vegas Strip in 1999, cementing Sin City's role as a magnet for conventions and an entertainment hub for more than just gamblers. "It's exactly the same strategy," he said.

Macao last year overtook Las Vegas in total gambling revenue, thanks to China's economic rise and passionate bettors like Wu. But although money from gambling makes up virtually all of Macao's tourist-related revenue, it makes up about half for Vegas, which has more than 130,000 hotel rooms versus about 17,000 in Macao.

"We want to have a healthier image that is tourism, not just gaming," said Bernadette Ozorio, administrative officer at the Institute for the Study of Commercial Gaming at the University of Macao.

The Venetian Macao's sports arena has 15,000 seats. In October, it will host an NBA game. The hotel's exhibition and meeting space comprises more than 1 million square feet, larger than the L.A. Convention Center. Managers say they have booked more than 40 regional meetings that will help fill rooms and boost revenue at restaurants and shops.

Venetian Macao also hopes to be a magnet for the young, rich and hip with places such as the Buddha Bar, intended to be the Eastern version of the wildly successful Tao nightclub and restaurant at the Venetian in Vegas.

Just how much Macao can diversify remains to be seen, but Western companies believe there's a lot of demand for entertainment that's not being met in this part of the world, particularly the market of 1.3 billion people in mainland China.

So Las Vegas Sands and other casino operators, including MGM Mirage, are moving to invest in gaming properties. Construction cranes dot this peninsula, population half a million, which in 1999 was returned to Chinese control after centuries of Portuguese rule.

The Venetian Macao, with its 3,000 suites, added more than 20% to Macao's hotel room capacity. Hotel managers said the rooms, which go for about $150 to $200 a night, were virtually sold out this week.

Macao's hotel room inventory will grow quickly in the next couple of years, particularly on the reclaimed land that connects the two islands south of Macao known as the Cotai Strip -- Macao's version of the Vegas Strip. A Four Seasons Hotel will open next to the Venetian, followed by a Shangri-la, a Sheraton, a Conrad and an Intercontinental. In all, more than a dozen hotels will be built by Las Vegas Sands and managed by the brands, adding about 20,000 rooms by 2010. Las Vegas Sands is expected to spend as much as $12 billion on the project.

"There's no question when you look at where the growth [in gaming] is, it is much greater across Asia," said David Katz, a gaming analyst at CIBC World Markets Corp. in New York. However, Katz recently has been advising caution about Macao because so much supply is coming on line.

If the Venetian and the others perform like Sands' first hotel here, Sands Macao, the corporation figures to have little trouble. Analysts say Sands Macao, opened in 2004 at a cost of about $240 million, paid for itself in one year. The Wynn Macao, Steve Wynn's high-end hotel that opened a year ago, also has performed well, analysts said.

Some of the uncertainty surrounding Macao's casino business lies in its legacy as a market heavily reliant on high rollers. In Vegas, casino managers are particularly keen on the "premium" mass market -- upper middle-class people who may visit several times a year and spend several thousand dollars a visit.

The question in Macao, Katz said, is: What does the premium mass market constitute and how many people fit that category?

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