Inside Asian Gaming

INSIDE ASIAN GAMING | Dec 2007 10 Cover Story Las Vegas Sands Corp’s Sands Macao, which became the first foreign-operated casino to open in Macau following the end of Stanley Ho’s 42-year casino monopoly, re- couped its initial US$265 million cost in less than a year. In doing so, it created expecta- tions of unrealistically rapid returns on in- vesent for future projects in the city. The US$2.4 billion Venetian Macao-Re- sort-Hotel opened in August this year and, due to the unprecedented scope and scale of the property in tiny Macau, is experienc- ing inevitable teething troubles. Mr Fried- man points out, however, that “The Venetian didn’t open well in Vegas. It took time for it to hit its stride. And look at it today. It’s hard to find a much more successful project than that anywhere in the world. Those are short term issues. You have to look at the bigger picture, and what happens over the first few months to me is irrelevant. It’s what happens over the next few years that’s important.” Divergent paths Macau granted its first casino license in 1937—just six years after Vegas did—but the monopoly which lasted in Macau until 2002 has stymied Macau’s diversification from hardcore gambling until now. The recent evolution of Vegas was “pri- marily the result of several people who saw some things in Vegas that other people didn’t,” claims Mr Friedman. “One was Steve Wynn, who saw an opportunity to create a destination resort environment in Las Vegas that went way beyond gaming—creating interesting things for people to do and see, and interesting forms of entertainment that at that time no one had ever attempted to incorporate into a gaming environment. Steve did that with great success.” Then came Las Vegas Sands Corp Chair- man Sheldon Adelson, who was “similar in many respects. He came to Vegas and saw it as an ideal convention destination. Shel- don was in the convention business before gaming, and was probably the most success- ful convention operator in the world. When I met Sheldon he had just sold Comdex for US$860 million. He brought that unique un- derstanding of the convention business to the gaming business. “What evolved was the Venetian model, which was a convention hotel with rooms that were larger, built more for business trav- ellers, but also served very well on the week- ends as casino rooms. “What people found out from the Vene- tian was that the convention visitor,who was always treated by the big casino operators in Vegas as an undesirable customer, was actu- ally a very desirable customer. Because even if they didn’t spend that much time in the casino gambling, they spent relatively more money on other things—food and beverage, entertainment, retail, etc.The facilities to ser- vice that customer didn’t exist until Sheldon came along.” Following the end of Macau’s casino mo- nopoly and the arrival of Messrs Adelson and Wynn in themarket,Macau has embarked on a revolutionary transformation set to bring it towards the Vegas-model on an accelerated timeframe.