TIMOTHY O’ROURKE / SPECIAL TO THE Toronto STAR, Jun 02, 2007 04:30 AM
The Hotel Lisboa stands as a historic conterpart to its new sister casino, the Grand Lisboa, under construction in the background. Six new gambling palaces have opened in Macau this year and a half-dozen more will open in the next seveal years, at an estimated cost of $25 billion (U.S.).
The Canadian Connection
Surprisingly, Macau’s economic resurgence has a lot to do with Canada. Its leader, chief executive Edmund Ho, studied at York University and worked as a chartered accountant in Toronto. Meanwhile, Macau’s richest man, Stanley Ho (no relation), maintains homes in Toronto and Vancouver. His three children hold Canadian passports and are major players, spending billions to build brash mega-casinos.
Macau took in $7.2 billion U.S. last year, overtaking Nevada as top casino destination
Tony Wong
Business reporter
MACAU-It’s a billion-dollar brawl and Asia’s gamblers are on the line.
Visitors to this former Portuguese colony on the southern tip of China will be forgiven for thinking they’ve stumbled onto the Las Vegas strip.
Stepping off the hydrofoil from Hong Kong, you can’t miss what looks like an exact duplicate of Las Vegas mogul Steve Wynn’s casino - a giant gold brick being erected on Macau’s glitzy Cotai Strip. Next door, the MGM Mirage has a hotel under construction. Las Vegas Sands, meanwhile, is building a new Venetian, part of the world’s biggest casino and convention centre.
Over the past year alone, six new mega-casinos have opened in this 25-square-kilometre enclave, with at least half a dozen more to be completed over the next several years at an estimated cost of $25 billion (U.S.)
“It’s like putting in the entire Vegas strip in Port Hope,'’ says John Crawford, a director of the Canadian Chamber of Commerce in Macau. “It’s chaos - but you can’t deny this is exciting stuff.”
The heavy hitters from Vegas are putting the squeeze on Stanley Ho, the billionaire who held a 40-year monopoly on gambling until his licence expired in 2002, after the Chinese reclaimed Macau from the Portuguese. But the 84-year-old tycoon isn’t backing away from the competition. In February he unveiled his new Grand Lisboa hotel, which strikes the eye like a giant jewel-encrusted toy robot-like Dalek from the Dr. Who television series, or better yet, a space-age mace from Battlestar Galactica.
But bling is in. Last month analysts confirmed Macau had overtaken the Las Vegas strip as the gambling capital of the world at the end of 2006, raking in more than $7.2 billion compared with Vegas’s $6.6 billion.
Even more astonishing is that Macau has only about half the number of casinos at 22, compared with Las Vegas’s 40 plus, with many more projects in the works.
More than 20 million visitors arrive every year in the only place gambling is allowed in China.
It’s a fact that’s not overlooked by global gambling tycoons who see the opening up of mainland China and the economic boom that is generating a billionaire class as a major growth factor.
Macau, sixty kilometres west of Hong Kong and about an hour away by hydrofoil, has a population of 470,000, smaller than Scarborough’s. However, the region is expected to grow 16 per cent this year and about the same next year, according to economists.
The new mega-casinos dominate the region’s skyline, which comprises the Macau peninsula and the islands of Taipa and Coloane.
Certainly, the competition has energized Macau, once dominated by Ho’s casinos, such as the Lisboa hotel, a once-grand palace that had over the years become decrepit, seedy and filled with prostitutes. The Lisboa has had a face lift, and now stands as a historic counterpart to its new sister casino, the Grand Lisboa.
“Before competition we used to joke that Stanley Ho hadn’t changed the carpet in the Lisboa in 40 years,” says John Crawford, the head of the Canadian International School in Macau. “Now it’s a completely different ball game.”
Still, with so many hotels and casinos being built, some analysts have warned a glut is inevitable. The government is hoping the convention trade will fill all those rooms
“There is certainly a downside risk if Macau doesn’t attract conventions, then that will be a big issue,” said Davis Fong, assistant business professor at the University of Macau, and director of the university’s Institute for Casino Gaming,
Macau currently isn’t seen as a destination where people stay long, says Fong. An average visit lasted of 1.1 nights in 2006.
With the new attractions, he expects the average stay to rise to 1.5 nights in the next three years.
A more immediate problem is the lack of available labour. Some smaller casinos have been forced to close their gambling tables after persistent staff poaching by other casinos. And the casinos are revising profit forecasts, saying higher wage rates are cutting into revenue.
Another issue is the question of Macau’s fragile infrastructure of aging roads and ferry terminals. While the government is investing hundreds of millions on new development, analysts say daylong traffic jams are inevitable.
And all this economic growth may be exacting a major social cost. Earlier this month a demonstration protesting corruption, soaring property prices and the rising cost of living turned ugly. Police hit protestors with batons and fired bullets in the air.
There is a growing sense that the gap between rich and poor is widening. While the monthly median income of unskilled workers is up by 23 per cent since 2003, rampant inflation has seriously eroded their buying power.
“The government had a wait-and-see attitude in their welfare strategy, but I think the demonstrations have been a wake-up call,” Fong said.
And there are other problems, including gambling addiction, a largely unreported affliction with severe economic and social costs.
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