Macao, a former Portuguese colony, was returned to Chinese control in 1999. It is one of the two special administrative regions governed by China, the other being Hong Kong. Under the Chinese policy known as “one country, two systems”, the Central Government is responsible for Macao’s defense as well as its foreign affairs, while Macau maintains its own legal system, police force, monetary system, and – most importantly – controls its own internal gambling affairs.
Stanley Ho’s Empire
Due to its limited resources and small population, Macao’s economy is largely based on gambling tourism. In 1962, the government issued an exclusive gambling license to Stanley Ho’s company – ‘Sociedade de Turismo e Diversões de Macau’. The license gave Ho a monopoly over Macao’s gambling industry, and earned him his fitting nickname – “the king of gambling”. Stanley Ho invested his money wisely, and has since diversified and expanded his businesses, turning them into one of the strongest business empires in Asia. Income from Ho’s businesses alone still constitute about one-third of the gross domestic product of Macau, even though his monopoly days have ended.
The Monopoly Ends
In 2002, after over 40 years, Ho’s monopoly was ended by the local government, and ever since a group of Las Vegas tycoons have been doing their best to get in on the gambling action in Macao. Back in 2005, the casino operator known as ‘The Las Vegas Sands Corporation’ announced joining forces with seven other major Vegas hotel chains in an attempt to develop ‘an Asian version of the Las Vegas Strip in the southern Chinese gambling enclave of Macao’.
The Americans Move In
The first American-operated casino to open its gates in Macao back in 2004 was ‘The Sands Macao’. During its first year alone, profits exceeded the total cost of the project, making it one of the most lucrative gambling investments of the year.
In August of 2007, the $2.4 billion Venetian Macao Resort opened its doors to the public. The hotel is equipped with 3,000 suites, a 15,000 seat sports arena, and a 6,000 seat banquette hall. But perhaps the most interesting fact about the Venetian is that its slot machines, blackjack, poker and baccarat tables and its other gambling games occupy a casino that is more than three times the size of the largest casino in Las Vegas. Plus, it’s only the first of 14 interconnected hotels being built in Macao by the Las Vegas Sands Corporation. The completed project will cost between $10 to $12 billion, and is just the largest of several giant gambling complexes being developed in Macao. The list of investors is endless. For example, the MGM Mirage is building its own project just next door. Earlier this year, Playboy has also announced its intentions of opening an entertainment and gambling complex in Macao.
Ho Fights Back
But Stanley Ho is hardly the man to throw in the towel. While foreign investors are doing their best to strip him of his former gambling empire, Ho is fiercely fighting back. Earlier this year Ho’s company opened ‘The Grand Lisboa’, which is a 52-story hotel tower built in the shape of a lotus flower. The Grand Lisboa carries over 170 baccarat tables and hundreds of slot machines, and is only the first stop in 85-year-old Stanley Ho’s list of huge projects.
The World’s No. 1 . . .but is that enough?
Most of the profits in Macao’s gambling industry are generated by Chinese gamblers from the mainland. Due to the great passion Chinese posses towards gambling, experts believe Macao will steadily keep growing, even though it has already surpassed Las Vegas in annual revenue back in 2006. But other experts predict that while the number of gamblers will continue to steadily rise, it will not grow fast enough to justify the vast expansion of casinos and hotels. If the income does not expand as fast as the new casinos and hotels being built, the result will be narrow profits for both the American operators and the local companies.
You can find a great article on similar topic at Eleventy Traveler Blog.