It's No Gamble

The deck is stacked in favor of Macau, the rapidly expanding luxury casino destination of Asia.
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When people think of gambling, along with the world of chance and luck, more often than not, Las Vegas comes to mind.

Until now, Vegas has been the epicenter of the casino market. But it'll have to move over and make room for another smaller, yet more aggressive player making a name for itself and taking a shot at the stakes -- Macau.

Macau, a tiny enclave located on the southeast coast of China, has been dubbed the "Monte Carlo of the Orient." And it's working on a slogan of its own: "Little Island, Big Gun."

Totaling about 16 square miles, the area of Macau -- including the Macau Peninsula, Taipa Island and Coloane Island -- doesn't boast a large space, especially when compared to Las Vegas' 113 square miles; however, it is garnering a significant amount of interest from adventure-hungry travelers and U.S.-based casino resort companies.

Well-known empires such as

Las Vegas Sands

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Wynn Resorts

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MGM Mirage

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have ventured into this region halfway across the world and are betting billions on its success.

However, based on last year's $5.6 billion in gaming revenue, it might be safe to say the spotlight on Macau hasn't been turned on because of any small reason.

Macau not only surpassed Atlantic City's $5 billion revenue, but also came in close to Las Vegas' Strip's 2005 gaming revenue of $6 billion. Research analysts predict Macau's 2005 gaming revenue to nearly double by 2009.

Clearly, this spot is quickly becoming a must-visit for gamblers worldwide.

Sing, Shop, Swim

Las Vegas Sands, which has been at the forefront of the Macau movement, opened Sands Macau in May 2004 and is currently in the process of further expanding the casino.

While nestled amid a tranquil expanse of waterfront gardens, Sands Macau is a completely different world inside. Upon entering, hostesses adorned in sequins and feathers welcome visitors, while bustling slot machines and baccarat, blackjack and roulette tables spread across plush carpeting entice players to the gaming floors.

And those visitors who don't enjoy gambling shouldn't fret -- the resort's 51 premium suites are equipped with such indulgences as in-room saunas, Jacuzzis, massage services, multiple plasma TVs and even karaoke rooms for the musically inclined.

In addition, VIP guests at Sands Macau are taken anything but lightly.

They are offered such over-the-top luxuries as around-the-clock concierges, private entrances and transportation services in the form of limousines, private jets and helicopters.

Of course, this treatment comes at a price -- these suites are only open to high-stakes gamblers after they purchase over $35,000 worth of chips.

The Venetian Macau, which Las Vegas Sands is scheduled to open in mid-2007 on the newly formed Cotai Strip, will cater to shoppers in addition to gamblers.

The Cotai Strip got its name by blending the names of Coloane and Taipa, the two islands it joins together. The islands, due to their undulating topography, stretches of lush lawns and breathtaking scenery were popular with nature lovers, golfers, hikers and bicyclists even before the Strip appeared.

And because Macau is a free port and sales tax is not charged in the region, shoppers can find a perfect haven at Venetian Macau as they weave through the resort's Grand Canal Shoppes. The mall, whose structural design will replicate the city of Venice, will be comprised of spas, hundreds of shops and numerous eateries.

There are several other natural attraction on the islands: Coloane's world-famous Hac Sa Beach -- with its fine black sand -- is a must for any dedicated beach-goer.

In addition, locals recommend visitors save their sweet-tooth cravings for Taipa, well-known for its traditional cookies. For bargain hunters, this island has a weekly fair every Sunday where crowds gather in search of handcrafted souvenir items, food and toys.

Betting on a Winner

Las Vegas Sands' share price is up 90% over the past year as investors warm up to Macau and realize the immense potential is may have, say analysts.

"In Macau, we recognized opportunity very early," says Las Vegas Sands President and COO William Weidner at Bank of America's 2006 Gaming Conference. "We recognized the value of the mass market understanding that with the growing Asian economy, more people have money and leisure time, and they can use that leisure time to do their favorite thing -- and that is to game."

For the first quarter of 2006, The Sands Macau generated $278 million in revenue, a 62.7% increase from the $171 million reported during the same quarter the previous year.

"We have a proven product here," says Weidner. "It's like beer at a ball game ... people like to game, and the wealthier they become, the more they like to enjoy and spend that wealth. So we've put ourselves in the position to seize market leadership in Asia."

According to the casino operator's financial data, slot-handle volume for the first quarter was $247 million, a 78.3% increase compared to the $138 million reported in the first quarter of 2005.

"Slots are becoming more in vogue as both women and new gamers seem to enjoy them, as they are not as intimidating," Goldman Sachs' analysts say in a research report compiled after a recent visit to Macau. "We did see people playing the machines, but ... the tables are still much more crowded."

As development grows in Macau, gambling revenues from slots and tables is not the only thing casino operators are focusing on. Many Chinese people love to travel, shop and own real estate in addition to gambling, Weidner points out.

Chinese private savings has reached $1.75 trillion in Chinese bank accounts, Weidner reports. The newly wealthy Chinese, who love to travel and spend, made 1.21 billion domestic trips in 2005, an increase of about 10%, he says.

In 2005, more than 18.7 million visitors arrived in Macao, a 12% increase from 2004, according to the Macao Statistics and Census Service.

With this in mind, Las Vegas Sands has assumed responsibility to oversee the development of hotels and shops while attempting to continue building up the Cotai Strip -- ultimately, to have a strip similar to Las Vegas'.

While Venetian Macao will act as the Strip's anchor property, a

Four Seasons


hotel and



Sheraton and St. Regis hotels will also go up on the Cotai Strip.

"We think Macau is starting to look like the re-emerging Atlantic City, where more restaurants, shopping, activities and quality hotel rooms are expanding the market away from just 'gamblers,'" says the Goldman Sachs' Macau gaming report.

The hope is that visitors will stay longer in Macau and make it into a three- or four-day trip, instead of the one-day trip it now often is. And with all that's available in the area, this exotic locale may indeed turn into the next hot luxury destination.

While applying the lessons learned in Las Vegas to Macau, Las Vegas Sands seems to believe Macau can even be transformed into the gaming capital of the East.

"We believe when we get into an airplane and fly to Macau, it's like a time machine because we see the future of Macau in

today's Las Vegas, and if we can duplicate that, we'll be extraordinarily successful," says Weidner.

So can you, if you play your cards right.

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