Vegas Plays to the World

The most remarkable feature of the flashy new Sands Macao casino, according to Asian high rollers, isn't the 60-ft.-tall windows or the 50-ton chandelier or even the opulent bar offering 200 kinds of tea (free!). No, for big spenders accustomed to the dingy, smoke-choked quarters of China's only legal gaming district, the highest praise for the first American-run casino goes to its ventilation system. "It doesn't feel stuffy," marvels local resident Tong Tin-Chung, "so you won't get dizzy." And the Sands is offering more than clean air--there are sequined showgirls, megaplex-size TVs and a 300-ft.-long buffet--all designed to reel in mainlanders like Li Duoshan, a businessman from nearby Zhuhai, who once dropped a six-figure sum in one of Macau's VIP baccarat rooms. Li has lost money at the Sands too, but still pooh-poohs its competitors: "There's no music, no shows. Except for gambling, there's nothing else to do."

Look out, seedy vice dens, Las Vegas is going global. Macau, Britain, Thailand and even squeaky-clean Singapore--which until this year had banned the G-rated business of selling chewing gum--are being bombarded with billion-dollar investment offers from the same companies that made a strip of Nevada desert synonymous with over-the-top entertainment. The sudden urge to export Vegas-style casinos stems as much from regulatory reform abroad as from limited growth opportunity at home. Indeed, after MGM Mirage announced plans last month to build a casino in Macau, Merrill Lynch predicted that the development would will add five times more value to the company than its proposed mega-merger with the Strip-centric Mandalay Bay.

So far, Vegas casino operators are placing their biggest bets on China, where the Middle Kingdom's age-old penchant for gambling is dovetailing with the world's fastest-growing economy. Chinese millionaires are being minted every day, and the World Trade Organization predicts that the country's booming middle class will encompass half a billion people by 2014. "And frankly," says MGM Mirage CEO Terry Lanni, "there's not much to do with that money there to enjoy yourself."

Enter Macau, the former Portuguese colony handed over to China in 1999. Last year some 12 million visitors poured into the 9-sq.-mi. territory, whose small contingent of casinos generated $3.6 billion in gaming revenue--three-fourths of what the Vegas Strip managed to pull in. Long a mecca for Asia's high rollers, Macau in 2003 averaged a daily haul of nearly $22,000 per gaming table compared with just $2,200 in Vegas. And thanks to the recent removal of certain internal travel restrictions, some 150 million mainlanders can now head to Macau without a tour guide as chaperone. "We're extraordinarily fortunate to be on the doorstep of China," says Bill Weidner, president of Las Vegas Sands, which opened the Sands Macao in May.