Last year, more money was gambled in Macao, China's version of Las Vegas, than anywhere else in the world. The big players in the casino world are rapidly expanding to serve what they see as a burgeoning market. This week Las Vegas Sands (NYSE:LVS) rolled out the biggest table stake yet, opening the mammoth Venetian Macao.Mammoth may be an understatement for this complex, which Las Vegas Sands claims is the second largest single-phase construction in the world, behind only a flower warehouse in Holland. Check out these numbers:
- 3,000 rooms
- 1.2 million square feet of convention space
- 550,000 square ft of gaming space, with 3,400 slots, 870 gaming tables
- 15,000 seat theater soon to feature the Cirque du Soleil.
- 10,000-person staff.
To put this in perspective, the gaming space alone is ten times the size of the White House.
This, and further aggressive plans by LVS, as well as Wynn Resorts (NASDAQ:WYNN) and MGM Mirage (NYSE:MGM), demonstrate confidence in the future of Macao despite some disturbing present-day statistics. Unlike Las Vegas, the average stay of in Macao is only 1.25 days. According to BusinessWeek, the daily take by casinos has been falling steadily as new properties come on line, from 10,000 in 2002 to $3,200 now and expected to drop to as little as $1,800 by 2010. Slots, the Las Vegas cash cow, are only a small fraction of the take in Macao.
So much of this development depends on the Chinese government allowing continued easy access to Macao, and the casino ability to grow the vacation and convention business. Certainly the money is flowing to China's businesspeople, much as it did to the Japanese in the 1970's and 80's. The Japanese showed a strong preference to use their new wealth to travel internationally. I wonder if the Chinese will as well? If so, Macao could be a gamble indeed.
This, and further aggressive plans by LVS, as well as Wynn Resorts (NASDAQ:WYNN) and MGM Mirage (NYSE:MGM), demonstrate confidence in the future of Macao despite some disturbing present-day statistics. Unlike Las Vegas, the average stay of in Macao is only 1.25 days. According to BusinessWeek, the daily take by casinos has been falling steadily as new properties come on line, from 10,000 in 2002 to $3,200 now and expected to drop to as little as $1,800 by 2010. Slots, the Las Vegas cash cow, are only a small fraction of the take in Macao.
So much of this development depends on the Chinese government allowing continued easy access to Macao, and the casino ability to grow the vacation and convention business. Certainly the money is flowing to China's businesspeople, much as it did to the Japanese in the 1970's and 80's. The Japanese showed a strong preference to use their new wealth to travel internationally. I wonder if the Chinese will as well? If so, Macao could be a gamble indeed.
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Reader Comments (Page 1 of 1)
8-31-2007 @ 4:36PM
Keith Shepard said...
Grotesque opulence. Makes me want to vomit.
9-01-2007 @ 7:42AM
Michael Schneider said...
There are risks that are probably not in the stock prices of some of these companies and wynn Resorts is scaling back on their plans a bit in Macau. However, there is a large population of sought after gamblers in Asia and when the Cotei Strip is developed it should draw travelers from everywhere in Asia. There are several new items about casinos on the Cotei Strip including the Las Vegas Sands opening in the China Briefing section (left side, halfway down page) at http://www.Barreloworld.com.