Macau, that former little picturesque colony of the Portuguese since 1553 certainly has had a colorful history. This tiny country of +/- 540,000 inhabitants must be wondering what is happening to the peaceful life that they once use to enjoy. Today Macau is going through a huge transformation and it is slowly becoming the ‘Las Vegas of the Orient’, or as some call it the ‘Vegas of the Far East’ whilst others still stick to calling it the ‘Monte Carlo of the Orient’.

Gambling has been legal in Macau since the 1850′s when the then Portuguese government first legalized it. According to The Macau Gaming Authority Macau has 28 operational casinos, however on this site you will find some 40 Casinos and 6 Slots Clubs, of which six are casinos currently under construction. In the 2007 the Grand Lisboa has its soft opening just before the Chinese Year which was followed by Crown Macau, now called Altira Macau, in April 2007. The Venetian Macau, the first casino to open on the Cotai Strip famously called by its owner Sheldon Adelson “Mother of All Entertainment Strips” had its grand opening on opening on 28th of August. MGM Grand Macau and Ponte 16 Casino, both on the Macau Peninsula opened late 2007/early 2008.

If you believe the concession holders another 10 casinos by the year 2010 is not an impossibility.

Add to this the expected +/-40 milion visitors by 2010, up from 18 million in 2006, hotel rooms to increase to 36,000 from 13,000 today and the recent gaming revenue eclipse of Las Vegas, it’s no wonder

Cotai Strip Development

How did this all happen so quickly, after all Dr. Stanley Ho through his flagship Sociedade de Jogos de Macau, S.A was rolling along nicely with his monopoly and 14 casinos for 30 years. Well Macau had problems with gangland wars, murders, prostitution and of course triad crimes related to gambling that all were getting out totally of control. Plus include in this a corrupt Portuguese Government that was on the way out in was no surprise that the new Macau SAR government decided that it was time for a change in the way gaming concessions were handled.

Since then Macau’s public security situation has markedly improved. Gangland violence has virtually disappeared since the departure of the Portuguese administration, which was widely perceived as corrupt and inefficient. With the growth of the casino industry, a business called “bate-ficha” was developed and it is usually run by different triad societies. The bate-ficha business is an element of triad involvement in Macau’s gambling industry. Bate-ficha involves selling customers “dead chips” that cannot be exchanged for cash in the casinos, but only by bate-ficha men or women, who are officially known as “gaming promoters” or “middlemen.” for a commission. Chief Executive Edmund Ho Hau-wah has declared his commitment to “exhaust all possible legal means to smash criminal gangs.

In 2002, the Tender Committee ended Stanley Ho’ s monopoly and granted 3 (now 6) companies the coveted gaming concession and sub-concessions, namely the Sociedade de Jogos de Macau, S.A. (SJM), Wynn Resorts (Macau) S.A., Galaxy Casino, S.A., Las Vegas Sands, Stanley Ho’ s daughter Pansy Ho and MGM Grand (MGM Grand Paradise), and the Australian PBL and Hong Kong controlled Melco partnership managed by Stanley Ho’ s son Lawrence Ho and James Packer. Today the Stanley Ho clan directly and indirectly, still has its finger in the pie in 4 of the 6 licenses, today Stanley Ho is in control of 21 casinos and just completed the Oceanus Casino complex, which will virtually pick up some of the traffic to Sands Macao.

The gaming concession holders have to comply with several conditions. They have to pay 35% of the gross revenue, a special gaming tax, a premium, and on top of that, they need to pay contributions, which is 1.6% of their gross revenue to be given to the Macau Foundation. The Macau Foundation is an organization that funds education, and other events. Besides that, the concessionaires also need to contribute 1.4%, or 2.4% of their gross revenue for development of infrastructure, for development of tourism, and for our social security funds. All that added together, they need to pay everything, 35% + premium + contributions (1.6% to Macau Foundation) + 1.4 or 2.4%, depending on their agreement in the contract.

Gambling in Macau is unlike that in Europe and the US. Gambling in Macau is an important part of its economy, which now is partly controlled by China. This is an important fact as many Hong Kong and mainland tourists like to gamble there. At present about 95% of the gamblers are Chinese but this slowly changing as the Western managed casinos start to open up and are inviting their high rollers, and also other foreign gamblers are now warming up and visiting Macau more often. And when the Cotai Strip development opens up we will see an significant rise in more and more foreign tourist as Macau will by then have a few world class destination resorts.

According to a recent report by Deutsche Bank, revenue in the Macau casino market may grow 25 percent a year over the next five years. The average casino win per table per day in Macau is $22,000, compared with $2,600 in New Jersey’s Atlantic City, and $2,200 in Las Vegas.

The Las Vegas of the Orient is on a roll. Over the next five years more than US$25 billion will be poured into new hotels, casinos, malls, theaters, convention centers, theme parks, as well as basic infrastructure like roads, upgrading of airport and ferry terminals and bridges. This is just the cost of approved projects,  not counting projects that have been announced but waiting approval.

Macau’s 24 casinos contain more than 120 VIP rooms and clubs, which offer only baccarat and set minimum bets at HK$1,000(US$128) or more. These VIP tables accounted for 77 per cent of the casino revenue generated in Macau last year 2006.

So acknowledge that while typically slot machine will represent 70 percent of earnings in Las Vegas, in Macau 90 percent of revenues comes from table. “This is related to the Chinese mentality. Players here believed that they have a better control of lady-luck if they play at a table,” he said. Macau is expected to have 10,000 gaming tables by the year 2008, which is up from 6,464 today!

By the year 2020, Macau’s revenue will be more than all of Northern American casino’s combined. Macau has the largest single mixed-use tourism project at over US$20 billion ever built anywhere on earth. In ten years, time there will be 60,000 hotel rooms in the Cotai area alone that will dwarf Las Vegas, Atlantic City, Monaco and Genting combined.

World casino gaming is a $68 billion industry and is expected to grow by 10 percent in the next five years to $100 billion.

Casino gaming is an $8.8 billion industry in the Asia-Pacific region and is projected to reach $18.5 billion by 2009. Because of the positive trend in casino operations in Asia-Pacific, US casino operators are now investing heavily in the region.

Most of Macau’s attractions are clustered around the peninsula’s centre – it’s a hilly but rewarding walk from church to fort and back again. Land reclamation at the foot of the peninsula has increased Macau’s acreage by 20% and created the two artificial Nam Van Lakes. Taipa Island is linked to the peninsula by two bridges, and a causeway links Taipa with Coloane – but watch this space, as there are ambitious plans to merge the two islands courtesy of a mega-reclamation business and residential project called Cotai City. The new Lotus Flower Bridge connects Taipa to the Chinese mainland and meets the Guangzhou-Zhuhai highway. Another Mega project will be the Hong-Kong-Macau-Zuhai Bridge.

As the Chinese economy expands and travel and visa policies are relaxed, more and more people are expected to make the trek to Macau. There are more than 100 million people within a three-hour drive and more than 1 billion people live within an easy plane flight of Macau. The World Travel Organization estimates that China will grant 150 million worldwide travel visas in 2020, up from 20 million in 2005. Statistics from Beijing University’s China Center for Lottery Studies (CCLS) shows that 600 billion yuan (US$72.5 billion) flow out of the country in gambling stakes every year.

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