VEGAS IS CLONING ITSELF IN MACAO

WITH AMERICAN MOGULS POURING IN BILLIONS, THE CHINESE COPY COULD SOON BE BIGGER THAN THE ORIGINAL STRIP

NEWSWEEK

From the magazine issue dated Jun 28, 2004

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Casino tycoon Sheldon Adelson's vision for Macao sounds familiar to anyone who's been to Las Vegas. There will be a $10 billion "strip" of 20 casino-resorts run by global chains, with up to 3,000 rooms each. The anchor hotel will be a copy of the Venetian, one of Adelson's Vegas properties, with opera-singing gondoliers on a man-made canal. "Our advertising will say 'Asian Las Vegas'," says Adelson.

The most famous faux city is now reproducing itself in Macao, the new frontier for the Vegas-mogul turf war. Adelson figures he has a two-year lead on his main U.S. rival, Steve Wynn, who just revealed details of his $705 million, 600-room casino-hotel. Last month Adelson opened his new $240 million Sands Macao, ending Hong Kong billionaire Stanley Ho's four-decade monopoly on gambling in the only Chinese city where casinos are legal. In two months, Adelson begins construction on the 120-acre "Cotai strip," 10 minutes from the Sands. The stakes: even Ho's dowdy '70s-era casinos are expected to gross near $5 billion this year--almost as much as Vegas.

Could sleepy Macao be bigger than Vegas? After the Portuguese colony returned to Chinese control in 1999, the new government broke the casino monopoly by auctioning off three licenses. Two winners were from Vegas: Adelson and Wynn, who acquired a 15-acre plot next to Ho's landmark Lisboa Hotel. Officials in Macao expect casinos on the scale of Wynn's Vegas landmarks, the Mirage and Bellagio. Wynn calls Macao "the most exciting thing I've done," and says his company "will be making most of its money in China." One Australian brokerage figures casino revenue in Asia will triple to $24 billion by 2010, boosted by the Vegas role in Macao.

It pays to move slowly in Macao, a magnet for Chinese triads. U.S. regulators have warned Vegas moguls that allowing organized crime into Macao casinos will jeopardize Nevada licenses. "Am I concerned about doing business with unsavory people? Yes," says Wynn. One way to navigate Macao is with a local guide. A third Vegas casino group, MGM, recently began talks on a Macao casino with an ultimate insider: Stanley Ho's daughter. That should improve the odds.