The Chinese cultural proclivity for gambling bubbles into the open at Macau:

Packer's Macau casino chases ultra-rich

Scott Murdoch From: The Australian May 14, 2007

AUSTRALIA'S richest man, James Packer, has turned to traditional glitz and glamour in his new Macau casino to avoid a pricing war and to corner China's powerful rich set.

The Crown Macau opened at the weekend after a slight delay. It is the first six-star casino in the Chinese territory, which is attracting gamblers from around the world.

The territory last year eclipsed Las Vegas as the gaming centre of the world, toughening the competition for Mr Packer's latest casino. The venture has moved to separate itself from Macau's more retail gaming houses with a particular focus on higher net-worth clients.

Credit Suisse analyst Gabriel Chan said the casino's move to sign up "junket operators" to deliver punters to the venue was positive.

"The management also said Crown Macau would not go into the price war over junket commission rates and would only pay the prevailing rate of 1.1 per cent of rolling-chip turnover," Ms Chan said. There had been some expectation that the rate could increase to 1.2 per cent, which analysts have factored into earnings forecasts.

Credit Suisse has forecast that Melco-PBL will increase its revenue from $US348 million ($419 billion) this year to $US2.45 billion by the end of 2009.

The entity's shares are currently trading around $US17.20, but the investment bank has targeted $US22.50.

The Crown Macau features a 36-storey tower, with 220 gaming tables, 500 machines and 216 hotel rooms. It has been built with Lawrence Ho - the son of worldwide casino tycoon Stanley, Ho who has dominated the Macau casino scene since its inception.

The casino is the cornerstone of Mr Packer's gaming growth plans, which are likely to increase again with the structural split of PBL announced last week.

The casino will target wealthy Chinese - some of the richest gamblers in the world - with a dedicated campaign to lure more VIP spenders.

The main competition for the Macau Crown is thought to be as Wynn Macau, the complex of US billionaire Steve Wynn.

The move by the Packers and Wynn, who made his name on the Las Vegas strip, is seen as bolstering Macau as a global gaming force. Macau is the only place in China were casino gambling is legal and the PBL company has two more projects in the pipeline.

Thanks to the GFC and Chinese government moves to curb the number of visitors to Macau, the venture does not seem to be going quite as well as originally hoped. Beside, a number of other casinos have been built in the territory since.

Even so, back in 1996 Macau was reported to have overtaken Las Vegas as a gambling centre:

Tiny Macau overtakes Vegas Strip

Macau, a tiny special administrative region of China, appears to have overtaken the famous Las Vegas Strip as the world's top gambling destination. Macau is set to earn $6.8bn (£3.6bn) in casino revenues in 2006 compared with Las Vegas' $6.6bn, say leisure industry consultants Globalysis.

Foreign casino operators entered Macau in 2001, two years after Portugal handed the territory back to China.

Tourists have flocked, 10.5 million arriving from China alone in 2005.

Macau's 23rd casino, Star World, is opening this week, and billions more dollars are due to be invested in new hotels, casinos and entertainment venues over the next few years.

Up until liberalisation, Macau's casino industry was controlled by Stanley Ho's Sociedade de Jogos de Macau.

Expansion plans

Now global gaming giants including Wynn Resorts, MGM Mirage, Publishing and Broadcasting and Galaxy Casino are building or have plans to build sites in the 23.8 sq-km territory.

The giant City of Dreams resort complex is set to feature the island's first underwater casino.

It is the brainchild of Mr Ho's son Lawrence Ho, whose Melco International is one of the region's biggest casino operators.

Macau claims to be home to the world's largest casino, the Sands Macao, but Las Vegas still dominates in terms of the number of slot machines and gaming tables.

Despite its smaller gaming capacity, Macau's revenues are outstripping those in Vegas, because its punters prefer the gaming tables to slot machines and play for higher stakes. [...]