SHANGHAI, Jan. 23 — Macao surpassed the Las Vegas Strip to become the world’s biggest gambling center in 2006, according to industry analysts and government figures released Tuesday.
Fueled by a casino investment boom and the millions of Chinese visitors flooding in, Macao said its gambling revenue had soared 22 percent in 2006, to $6.95 billion. A Portuguese colony that was returned to China in 1999, Macao is the only place in China where gambling is legal, and last year it attracted more than 22 million visitors, mostly from China
Las Vegas has not released its full-year statistics but the vaunted desert strip trailed Macao in the final months of last year and analysts estimate that revenue on the Strip was about $6.5 billion in 2006.
This year, Macao may take in $8 billion in gambling revenue, according to industry analysts, up from $2 billion in 2001. Macao is still behind the entire state of Nevada, which in 2005 reported close to $12 billion in gaming revenue. “Whether or not Macao passed Las Vegas last year is just a headline,” said Harry Curtis, a gambling analyst at JPMorgan. “The fact is, as we stand today, Macao is going to be a bigger market than Las Vegas. And by the end of the decade it could be twice the size of Las Vegas.”
Hoping to cash in on the city’s gold rush, some of the world’s biggest casino operators, including Las Vegas tycoons like Sheldon G. Adelson, Steve Wynn and Kirk Kerkorian, have agreed to invest more than $20 billion in Asia’s Las Vegas, as it is sometimes called. They are planning new luxury hotels, large casinos and V.I.P. suites to cater to the enormous gambling appetites of Chinese, many of whom have only recently been granted permission to travel to Macao.
For investors, a big lure of Macao is that, on average, its gambling tables pull in about seven times what the tables in Las Vegas do. The winnings are a testament to how serious the gamblers are in this part of the world, despite the fact that per capita income in China is just $1,700 a year.
Macao’s success has led neighboring regions to rethink their own tourism strategies. For instance, Singapore is going ahead with plans to build its own casino resort, and even Hong Kong officials have talked about bringing gambling to the territory.
But few gambling centers will be able to match the longtime experience of Macao, which over the decades has built up 24 casinos and over 2,700 tables. To accommodate even more visitors, the 10-square mile city, which has 470,000 residents, is expanding its airport and reclaiming tracts of land from the sea.
The city’s modern transformation began in 2002, after the Macao billionaire Stanley Ho’s 40-year monopoly on the city’s gambling operations expired. Macao then issued new licenses to a handful of casino operators, including Mr. Ho, starting a boom in building casinos and hotels.
The city now has two Las Vegas-style casinos, the Sands Macao and the $1.2 billion Wynn Macao, which opened late last year with 600 rooms and about 200 gambling tables. Mr. Ho’s family of casinos and entertainment palaces are also expanding.
But perhaps no one in Macao is as ambitious as Mr. Adelson, who operates the Las Vegas Sands Corporation. Mr. Adelson says he plans to spend $4 billion to build a Las Vegas-style strip that will include the world’s biggest casino, the Venetian Macao — a 10.5-million-square-foot hotel, casino, shopping mall and entertainment complex.
Part of the plan among investors is to transform Macao into more of a convention, entertainment and leisure destination rather than simply an arena for hardcore gamblers, many of whom drive across the border from China and camp out in their cars.
Macao’s growth spurt since 2000 occurred because China liberalized its travel policies and allowed more of its citizens to visit Macao and other parts of the world.
The Chinese government, however, is not wholeheartedly behind the Macao gambling boom. Some of Macao’s highest rollers have been caught gambling with government money or using cash siphoned from state-owned companies.
In 2005, for instance, Beijing said that more than 8,700 “party members and cadres” were punished for gambling.
In one case, a married couple embezzled more than $50 million from the state-run Bank of China to pay off gambling debts in Macao.
Some analysts have also warned about overinvestment in Macao and overly rosy forecasts of gambling revenue growth.
Still, in an interview, Mr. Adelson once said that turning Macao into the next Las Vegas is not difficult. “This is a no-brainer,” he said. “If you build it will they come? In my mind, not only will they come, but they’ll come in droves.”
