Macau or bust! Asia's Las Vegas fights the economic crisis

It was hailed as the Vegas of the East. But the casino operators who piled into the Chinese city may have backed a loser

Lady Luck is casting a jaundiced eye on Macau, Asia's Las Vegas and the world's biggest gambling market. The former Portuguese colony racked up one of the longest runs of good luck of any territory in the world, but the activity around the green baize tables today is a far cry from the heady days of just a year ago when the croupiers in Macau scooped up more money than Las Vegas and Atlantic City put together.

Macau is fighting the same hex as the rest of the world – the economic crisis – but that has combined with restrictions on the number of visas issued to mainland Chinese VIP gamblers, or high-rollers. News that China will not relax travel restrictions to the enclave hit shares in Macau casino operators hard this month, with Galaxy registering its steepest fall in four years in Hong Kong trading, and the SJM group belonging to Macau's father of gambling, Stanley Ho, also suffering losses.

So Macau is having to deal with less money spent on the tables and less cash to spend on a dramatic expansion plan that was supposed to transform the enclave into Asia's biggest tourist destination

Until 1998, Macau was a sleepy Portuguese dependency, but in the past five years the southern Chinese city has been transformed into the gambling destination of choice for China's high-rollers, who along with millions of other mainland tourists helped Macau overtake Las Vegas as a gambling resort, earning £7bn last year from the tables alone.

To say that Macau has totally seized up would be an overstatement though. There are still thousands of gamblers in every casino you visit, from Las Vegas supremo Steve Wynn's downtown pleasure palace to the MGM Grand. On the floor of the casinos in Macau, instead of the cocktail waitresses familiar from Las Vegas, porters wheel carts of free tea and bottled water. The bars are largely filled with Westerners, while the Chinese focus on the matter in hand – gambling. "Gambling is not a leisure activity for a lot of the people who come here. It's like people in Britain having two pints on the way home, it's part of the culture," said one senior casino executive.

However, average casino profits did slump to £650m a month in the last four months of 2008, down 20 per cent from the average monthly take of £811m between January and August. It's at the Venetian Macau, Sheldon Adelson's £1.6bn project, that the slowdown can be seen most keenly. With 3,000 hotel suites, it opened in August 2007 and was supposed to set down a marker for future development, and it has – the casino is breathtaking in its scale, topped off with the Venetian resort complete with purpose-built canals and gondoliers. But late last year, Las Vegas Sands Corp cut 500 casino workers at the Venetian (around 2 per cent of the total workforce); scaled back weekly hours for 1,000 employees and cut back tips. The company also halted construction of five new hotels, huge shopping centres and several new casinos.

Sands Corp is not the only one feeling the pain. Across the enclave as a whole, 10,000 foreign workers and 2,000 workers from Macau have lost their jobs so far.

Ciaran Carruthers, chief operating officer of Star World Hotel and Casino, said: "Our fourth quarter was down on the third quarter by 8 per cent, but we were still up by 31 per cent on the year. It's time to take some of the heat out of the market and to get back to some semblance of normality." Star World is operated by the Hong Kong group, Galaxy Entertainment, controlled by the billionaire Lui Che-woo, which has also mothballed its Cotai Strip development until the global economy turns in its favour.

Along the Cotai Strip, a finger of reclaimed land which merges the Coloane and Cotai islands, building has come to a standstill on major hotel, casino and shopping projects, including international brands like Shangri-La, St Regis and the Sheraton group. Thousands of migrant workers from southern China have been sent back across the border, joining the ranks of unemployed factory workers in the engine of the mainland economy already reeling from crashing exports. The Beijing government is worried that unemployment in industrial zones in Guangdong could lead to social instability on a major scale.

China's Vice-President Xi Jinping visited Macau recently and urged the territory to diversify its economy as a way of dealing with the slowdown.

Fear in Macau is also focused on the other end of the income scale. VIP high-rollers make up 70 per cent of revenues in Macau, and the casinos are redoubling their efforts to attract the mainland gamblers who keep the roulette wheels spinning. This comes as the Chinese government has put restrictions on trips to Macau, limiting mainlanders to one visit every three months in an attempt to keep Chinese domestic consumption high in the face of a slowing economy as well as preventing corrupt officials gambling away the city coffers on a throw of the dice.

A recent investigation found some cadres visiting three times a week to try to sweeten the local government balance sheets. More than 50 government officials from Guangdong are accused of having a flutter with £2m of public money and six have been jailed or fined, including four years for Wu Xingkui, deputy leader of the Communist Party in the town of Yunfu. He had previously headed an anti-gambling taskforce.

Mr Carruthers says that the changed reality will give the territory's gaming business a chance to take stock and perhaps change the focus to mass-market gamblers, the punters who made Las Vegas so strong. He said: "The worst predictions for this year still have Macau having a better year than Las Vegas ever had. If I was a betting man, I'd say Macau is still going to be very strong for 2009."

From Vegas to Macau: The casino operators who went east

Sheldon Adelson Adelson paid $128m in 1989 for the Sands Hotel and Casino in Las Vegas, which he later demolished and in its place built the Venetian at a cost of $1.5bn. He was the US's third richest man, but at the end of last year he topped a different Forbes list: "America's 25 Biggest Billionaire Losers".

Steve Wynn Wynn first visited Las Vegas at 10, and when he took over the Golden Nugget aged 31 he became the US's youngest casino operator, developing the Bellagio and the Mirage. In 2006, Wynn, who suffers from an eye disease, accidentally put his elbow through a Picasso painting that he had agreed to sell for $139m.

Start your day with The Independent, sign up for daily news emails
Voices
There will be a chance to bid for a rare example of the SAS Diary, collated by a former member of the regiment in the aftermath of World War II but only published – in a limited run of just 5,000 – in 2011
charity appealTime is running out to secure your favourite lot as our auction closes at 2pm today
News
people
News
Elton John and David Furnish exchange marriage vows
peopleSinger posts pictures of nuptials throughout the day
News
File: James Woods attends the 52nd New York Film Festival at Walter Reade Theater on September 27, 2014
peopleActor was tweeting in wake of NYPD police shooting
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Sport
Martin Skrtel heads in the dramatic equaliser
SPORTLiverpool vs Arsenal match report: Bandaged Martin Skrtel heads home in the 97th-minute
News
newsAstonishing moment a kangaroo takes down a drone
Arts and Entertainment
The Lord of the Rings and The Hobbit director Peter Jackson with his star on the Hollywood Walk of Fame
film
Life and Style
tech
News
people
News
Billie Whitelaw was best known for her close collaboration with playwright Samuel Beckett, here performing in a Beckett Trilogy at The Riverside Studios, Hammersmith
people'Omen' star was best known for stage work with Samuel Beckett
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: EWI / IWI Installer

£23000 - £25000 per annum: Recruitment Genius: This leading provider of design...

Ashdown Group: IT Support Analyst - Chessington

£25000 per annum: Ashdown Group: IT Service Desk Analyst - Chessington, Surrey...

Recruitment Genius: Technical Support Analyst / Helpdesk Support Analyst

£16000 - £19000 per annum: Recruitment Genius: Our client is the UK's leading ...

The Jenrick Group: Finance Manager/Management Accountant

£45000 - £55000 per annum + benefits: The Jenrick Group: Finance Manager/Manag...

Day In a Page

Surrounded by high-rise flats is a little house filled with Lebanon’s history - clocks, rifles, frogmen’s uniforms and colonial helmets

Clocks, rifles, swords, frogmen’s uniforms

Surrounded by high-rise flats is a little house filled with Lebanon’s history
Return to Gaza: Four months on, the wounds left by Israel's bombardment have not yet healed

Four months after the bombardment, Gaza’s wounds are yet to heal

Kim Sengupta is reunited with a man whose plight mirrors the suffering of the Palestinian people
Gastric surgery: Is it really the answer to the UK's obesity epidemic?

Is gastric surgery really the answer to the UK's obesity epidemic?

Critics argue that it’s crazy to operate on healthy people just to stop them eating
Homeless Veterans appeal: Christmas charity auction Part 2 - now LIVE

Homeless Veterans appeal: Christmas charity auction

Bid on original art, or trips of a lifetime to Africa or the 'Corrie' set, and help Homeless Veterans
Pantomime rings the changes to welcome autistic theatre-goers

Autism-friendly theatre

Pantomime leads the pack in quest to welcome all
The week Hollywood got scared and had to grow up a bit

The week Hollywood got scared and had to grow up a bit

Sony suffered a chorus of disapproval after it withdrew 'The Interview', but it's not too late for it to take a stand, says Joan Smith
From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?

Panto dames: before and after

From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?
Thirties murder mystery novel is surprise runaway Christmas hit

Thirties murder mystery novel is surprise runaway Christmas hit

Booksellers say readers are turning away from dark modern thrillers and back to the golden age of crime writing
Anne-Marie Huby: 'Charities deserve the best,' says founder of JustGiving

Anne-Marie Huby: 'Charities deserve the best'

Ten million of us have used the JustGiving website to donate to good causes. Its co-founder says that being dynamic is as important as being kind
The botanist who hunts for giant trees at Kew Gardens

The man who hunts giants

A Kew Gardens botanist has found 25 new large tree species - and he's sure there are more out there
The 12 ways of Christmas: Spare a thought for those who will be working to keep others safe during the festive season

The 12 ways of Christmas

We speak to a dozen people who will be working to keep others safe, happy and healthy over the holidays
Birdwatching men have a lot in common with their feathered friends, new study shows

The male exhibits strange behaviour

A new study shows that birdwatching men have a lot in common with their feathered friends...
Diaries of Evelyn Waugh, Virginia Woolf and Noël Coward reveal how they coped with the December blues

Famous diaries: Christmas week in history

Noël Coward parties into the night, Alan Clark bemoans the cost of servants, Evelyn Waugh ponders his drinking…
From noble to narky, the fall of the open letter

From noble to narky, the fall of the open letter

The great tradition of St Paul and Zola reached its nadir with a hungry worker's rant to Russell Brand, says DJ Taylor
A Christmas ghost story by Alison Moore: A prodigal daughter has a breakthrough

A Christmas ghost story by Alison Moore

The story was published earlier this month in 'Poor Souls' Light: Seven Curious Tales'