Inside Asian Gaming

May 2014 inside asian gaming 19 luxury resort under construction on Cotai, as a current example of a developer betting government policies that would prohibit a casino on the site won’t be applied once it’s built. Epidemic of Opportunity Sands Macao and other operators benefited from another fortunate twist of fate. In late 2002, just as concessionaires were raising funds for new casinos, severe acute respiratory syndrome (SARS) emerged, leaving nearly 1,000 dead in a seven-month reign of terror in southern China and beyond and bringing regional travel to a virtual halt. The outbreak appeared to extend Macau’s losing streak, but instead, SARS became the most fortuitous pandemic in Macau’s history. In the wake of SARS, amid mounting evidence that mainland cover-ups had helped spread the disease, Beijing tried to undo the damage to Hong Kong and Macau. In 2003, Hong Kong demonstrated its dissatisfaction on the sixth anniversary of its return to Chinese sovereignty with street protests that drew an estimated 500,000 people. Proposed anti-sedition legislation was ostensibly the protest’s focus, but many believe mainland authorities discerned economic roots, as Hong Kong was getting poorer for the first time in a generation, especially relative to the mainland. Whether it was unintended irony or political calculation, Beijing’s steps to assist Hong Kong and Macau centered on deepening economic dependence on the mainland. The Closer Economic Partnership Arrangement boosted the cities’ exports to the mainland. More important, the Individual Visitor Scheme (IVS) was instituted, allowing mainland citizens from four cities in neighboring Guangdong province to travel to Macau and Hong Kong without joining a tour group. The University of Macau’s Mr Siu calls the unforeseen policy change “a huge present to Macau, and hence to Sands Macao, as well as other casino operators here”. From 4.24 million mainland visitors in 2002, the count expanded 35% in 2003 and 66% in 2004 to reach 10.5 million in 2005. IVS now covers more than 50 cities, home to 300 million of the mainland’s wealthiest citizens. Last year, mainland visitors totaled 18.6 1974 revolution, and following Hong Kong’s 1997 handover, mainland leadership valued reunification with Macau largely as a building block toward reunification with Taiwan. But within months of Macau’s return, Taiwan’s election of independence advocate Chen Shui Bian as president plunged cross-strait relations to a decade-long low and tossed a monkey wrench into Beijing’s envisioned smooth path to reunification. CDIB further harmed its cause by trying to strong-arm the Tender Commission into granting it a Macau banking license, which CDIB had repeatedly been denied, and other business permits, reportedly leading to a multilingual shouting match during its commission presentation. LVS, on the other hand, wowed the commission in its portion of the presentation with plans for a “temporary” downtown casino that would evolve into Sands Macao and a replica of The Venetian the company planned to build on Cotai, then a barren stretch of reclaimed land linking Macau’s outer islands of Coloane and Taipa. “We very much liked the proposal of The Venetian,” Tender Commission member Jorge Oliveira testified in the 2008 lawsuit brought by Hong Kong businessman Richard Suen against LVS seeking compensation he said the company promised him for using his influence in Beijing to help it obtain the Macau license. Mr Suen won the case, which was tried in Las Vegas. LVS appealed. Mr Suen won again in a second trial that concluded last year with a $70 million jury award and a court-ordered $31.6 million in interest. (Mr Oliveira did not testify at the second trial.) “The problem was with the other side,” said Mr Oliveira, referring to CDIB. But LVS didn’t understand the basics, let alone the nuances, of cross-strait issues at the time, according to sources. In 2003, 500,000 Hong Kong people took to the streets to demonstrate their dissatisfaction on the sixth anniversary of their city’s return to Chinese sovereignty. “We very much liked the proposal of The Venetian,” Tender Commission member Jorge Oliveira testified in the 2008 lawsuit brought by Hong Kong businessman Richard Suen against LVS seeking compensation he said the company promised him for using his influence in Beijing to help it obtain the Macau license. Cover Story >>