Las Vegas casinos bow to tiny Macau
LAS VEGAS — Most people still think of the gambling industry as anchored in Las Vegas. They would be wrong. The center of the gambling world has shifted 16 time zones away to a tiny spit of land on the southern tip of East Asia.
An hour's ferry ride from Hong Kong and an afternoon flight from half the world's population, Macau is the only place in China where casino gambling is legal.
Each month, 2.5 million tourists flood the glitzy boomtown to try their luck in neon-drenched casinos that collect more winnings than the entire American gambling industry. The exploding ranks of the Chinese nouveau riche sip tea and speak in hushed tones as they play at baccarat, a fast-moving game in which gamblers are dealt two cards and predict whether they will beat the banker.
The textile factories that stood shoulder to shoulder with small-time gambling halls as recently as the early 2000s have given way to hulking American-run enterprises larger than anything found in the states. The gangs, prostitutes and money launderers that once operated openly in this town half the size of Manhattan have at least receded from public eye.
“It was a swamp,” said Sheldon Adelson, CEO of Las Vegas Sands, as he looked back on his early, risky venture in the forgotten colonial outpost.
“They wanted to change the face of Macau from the gambling dens to that of conventions and resorts,” he added during recent testimony, flashing a grin and boasting that it would have taken a genius to imagine the profits he could reap there.
Macau now powers three of the four largest American casino companies. Sands, Wynn Resorts Ltd and MGM Resorts International rode out the recession, thanks to the gambling appetite of a region where notions of luck and fate are baked into the culture, and there is no religious taboo on games of chance.
But as U.S. corporations have remade Macau, Macau has remade them.
The town's criminal undercurrent has resurrected the specter of corruption the industry worked for so long to escape. MGM has lost its license to operate in Atlantic City, N.J., while Sands and Wynn are under federal investigation for violations of a touchstone anti-corporate bribery law.
The quest for Asian riches is changing Las Vegas as well. Casino bosses are tweaking their flagship casinos to look and operate more like Macau-style properties. As they succeed, hints of organized crime are returning to Sin City, this time in the form of Chinese gangs.
When China reassumed sovereignty of Macau from Portugal in 1999 and abolished a long-standing gambling monopoly, American companies rushed in to try their luck. Since then, annual revenue in the former backwater has grown tenfold, stacking up to $38 billion — four times that of Las Vegas and Atlantic City combined.
Wynn Las Vegas now makes nearly three-quarters of its profits in Macau. CEO Steve Wynn, dubbed the “King of Las Vegas” for his role in shaping the contours of the Strip, stirred a minor scandal in 2010 when he said he might ditch Sin City and move his corporate headquarters to China.
Sands, which owns the Venetian and Palazzo on the Las Vegas Strip, earns two-thirds of its revenue in Macau. Adelson's first casino opening there caused a stampede that ripped doors off their hinges. He now describes Sands as “an Asian company with a presence in Las Vegas and the U.S.”