Move over Las Vegas, Macau is here

HONG KONG: Booming Macau will leap-frog the world famous Las Vegas strip as the world’s strongest casino market this year, analysts said, predicting its gaming halls will generate $8bn by ’07.

With more than $20bn worth of investment committed to some 25 new hotels and casinos in the next five years the southern Chinese territory is expected to emerge as a world-class tourism destination, according to analysts Globalysis. “We believe that Macaus (revenue) will surpass that experienced on the Las Vegas Strip in ’06, signalling Macaus success as a global casino gaming destination,” it said in a statement.

While it gave no forecasts for Las Vegas revenues, the dozens of glitzy casinos on the strip earned just below $6bn in ’05. The company stressed Macau was still some way from eclipsing all of Las Vegas’ hundreds of casinos, which brought in $9.1bn in ’05.

Globalysis said Macau’s mushrooming gaming business would be boosted by growth in casino-tourism related sector. “Macau will continue its transformation into a holistic leisure tourism destination in ’07,” Globalysis partner Jonathon Galaviz said.

“We believe that Macau’s casino gaming revenue in ’07 will be driven by substantial growth in non-casino amenities such as new convention centre venues and innovative entertainment options incorporated into Macau’s fresh Las Vegas style integrated resorts.” Macau’s century-old casino sector was resuscitated from years of crippling decline in ’01 when the Chinese-backed government of the former Portuguese enclave wrested a 40-year operations monopoly from ageing tycoon Stanley Ho.

The move brought in a flood of American investment, principally from Las Vegas Sands — operator of the phenomenally successful Venetian resort — which reversed the city’s ailing fortunes when it opened the Sands Macau in ’04.

Sands on Thursday posted record quarterly growth for the three months to June ’06, with pre-tax profits up 52.7% to $117m, a company statement said. Growth in Macau would not have been possible without a coincidental relaxation of travel restrictions on Chinese tourists, which boosted visitors to the tiny territory to a record 18m in ’05.

According to Globalysis, most of the investment committed to Macau over the next five years is destined for the Cotai Strip, a gaming district under construction by the Sands corporation on a 1,00,000 square-metre plot of reclaimed land.