Inside Asian Gaming

INSIDE ASIAN GAMING | April 2012 4 I n 2002, on the 1st of April to be exact, the government of the fledgling Macau Special Administrative Region of the People’s Republic of China formally approved the new casino concessions awarded to Stanley Ho’s Sociedade de Jogos de Macao, Hong Kong-based Galaxy Casino and Steve Wynn’s Las Vegas-basedWynn Resorts. It was perhaps no more than a matter of administrative housekeeping—the three having been chosen two months earlier, the winners of a global tender that had drawn more than 20 companies and investment groups—but it marked the beginning of Macau’s transformation from the sleepy, seedy gambling town it had been in colonial times—the “Monte Carlo of the Orient” was the generous title appended to it—to a resort destination of worldwide significance; the “Las Vegas of Asia”. Nothing would be the same again, not Macau, not China, not the global casino industry, which could be said to be truly multinational from that day forward. The process of completing the contracts with the concessionaires would extend into June of that year, and as it happened, before the year was out, the playing field would be altered again, dramatically, with the awarding of a separate concession to a second US operator, Las Vegas Sands. LVS Chairman Sheldon Adelson had been one of the first to recognize the vast possibilities of themarket as a play on China’s booming economy. He was wary, however, of taking the plunge on his own, influenced no doubt by Macau’s image as theWild, Wild East, rife as it was at the time with reports of gangland influence and rival criminal clans jostling for territory, sometimes violently so, in Stanley Ho’s lucrative VIP gambling rooms. Having decided for the sake of his Nevada license and to mitigate his financial risk that it was safer to enter the market as a manager rather than a developer of casinos, LVS found in Galaxy, which had come under the control of Hong Kong construction and property magnate Liu Che Woo, a partner with pockets more than deep enough to handle the capital investment end. But the partnership foundered. LVS’ commitment to the development of Cotai was perceived by many at the time as a risky bet—a view that Galaxy may have shared. In any case, it’s hard to see how it made sense from Galaxy’s vantage that as prospective builder and owner they would have to shoulder the lion’s share of the partnership’s costs and the attendant risks. The government, on the other hand, had bought into Mr Adelson’s singular vision for the reclaimed land between the former islands of Taipa and Colane, and since Galaxy already had a concession, a way had to be found to allow LVS to go forward independently. The accommodation that was reached, technically a “subconcession” under Galaxy— in effect a fourth license—hadn’t been Ten Years of Change Looking back to when an industry and a city were set upon a path that would transform them beyond recognition Cotai visionary—Sheldon Adelson