Inside Asian Gaming

Editor and Publisher Kareem Jalal Director João Costeira Varela Business Development Manager Matt Phillips Operations Manager José Abecasis Contributors Mike Grimes, Octo Chang, Richard Marcus, Christopher Cottrell, Jeff Mann Photography Ike Graphic Designer Brenda Chao Inside Asian Gaming is published by Must Read Publications Ltd Suite 1907, AIA Tower, 215A-301 Av. Comercial de Macau - Macau Tel: (853) 6646 0795 For subscription enquiries, please email [email protected] For advertising enquiries, please email [email protected] or call: (853) 6646 0795 www.asgam.com Printed by Icicle Print Management (Macau) Ltd Tel: (853) 2871 2818 Fax: (853) 2871 2898 www.icicleprint.com E D I T O R I A L V enetian Macao opened on August 28 to capacity-busting crowds, but pre-opening expenses and development costs at other properties resulted in Las Vegas Sands Corp (LVS) suffering a US$48.5 million loss in the third quarter of 2007. Another factor behind the loss was that gamblers at the Venetian properties in Macau and Vegas were simply luckier than usual. “We got shellacked,” summed up LVS President Bill Weidner. “It is what it is.” LVS Chairman Sheldon Adelson added, “That’s the nature of the business. We just didn’t have a good quarter and that’s the end of it.” The mammoth Venetian Macao is also reportedly still dealing with efficiencies in its opera- tions, given its unprecedented scale in tiny Macau. Mr Adelson is confident though that the 3,000-suite property, with its 546,000 sq. ft casino, will gain its bearings. “We’re firing on all cylinders and we’re getting to where we need to be,” Mr Adelson said in response to an analyst’s question. “I just have one comment for my competitors. Bigger is better.” Steve Wynn may beg to differ, however, given the modest scale of his own high-end Macau property—a mere fraction of the size of Wynn Las Vegas—which still enabled his company to double its third-quarter revenues over the same period last year. In “Bigger Versus Better” on page 15, we discuss the clash of Messrs Adelson and Wynn’s resort-building ideologies. In our cover story, on page 6, we discuss the clash of business strategies among “local” and “foreign” casino operators in Macau. Galaxy Entertainment Group’s Francis Lui informs In- side Asian Gaming that not only is his company the only new entrant to the Macau gaming market that has not backtracked on its initial strategy, but it will also steadfastly take its cues from the market going forward, rather than adopting Mr Adelson’s bullish “build it and they will come” philosophy. As a company run by locals, Galaxy feels it is more sensitive to locals’ tastes than other new casino operators descending on Macau. By meeting locals’ tastes and needs, Galaxy has established a “demand driven” brand that has thrived in the face of competition from the best of Vegas. Until proven otherwise It’s a mark of a civilised society that a person accused of a crime should have the presump- tion of innocence until proven guilty by a court. This courtesy should be extended as equally to Ao Man-long, Macau’s former secretary for transport and public works, as it should to any private citizen. The fact that Mr Ao was a prominent public figure and that the alleged sums involved are very large – a US$100 million fortune not so far satisfactorily accounted for and alleged- ly linked to the award of public contracts and other favours over seven years – are not grounds for withholding this courtesy. The feeding frenzy of speculation in some of the media surrounding the case against Mr Ao is particularly disturbing and looks worryingly like a lynch mob when one comes from a society where the concept of ‘contempt of court’ limits pre-trial media reports to a few basic details. Under the Portuguese-style legal system developed in Macau, trials are presided over and adjudicated by judges without the involvement of juries. The presumption under this system is that it’s not possible to prejudice a professional judge against a defendant; ergo before the trial proper has even started, the media have had a feeding frenzy, in some cases re- stating allegations as if they were proven facts. Having said that, the civil laws of defamation still apply, and the suggestion that Mr Ao somehow received money to assist in speeding up casino-related development projects needs very careful reporting when mentioned without the legal privilege of contempo- raneous court reporting, otherwise publications risk at the very least a warning letter from libel lawyers. The fact that Macau’s Commission Against Corruption has briefed the media that no west- ern companies were involved in the alleged graft, further increases the risk of what libel law- yers call ‘jigsaw identification’ where either so many clues are given in media reports that the subject of the allegation or suspicion is identified by a process of elimination, or where partial release of information leads recipients of that information to jump to wrong conclu- sions. In both cases, such an outcome will not help the long-term aspiration of Macau to achieve complete probity and transparency in government and in business. The best way to achieve this is for Mr Ao to have a fair trial, not just before the three presiding judges of the Court of Final Appeal, but in front of the media and the wider world. Kareem Jalal and Mike Grimes We crave your feedback. Please send your comments to [email protected] Demand Driven