Transcripts

China's Gaming Industry Has Evolved Into A High Roller

SUZANNE PRATT: The U.S. gaming industry is slowing down as it deals with the sagging economy. But casinos in China are on a winning streak, attracting 27 million visitors last year alone. China's Macau has become the world's number one gaming destination. As Nick Mackie reports, the really big winners are casino developers like the Sands Macau.

NICK MACKIE, NIGHTLY BUSINESS REPORT CORRESPONDENT: Eight hundred gambling tables, 6,000 slot machines, half a million square feet of gaming. This is the world's biggest casino, the Las Vegas Sands Venetian Macau, which opened on August 28, 2007 and has now welcomed over 10 million visitors. The Venetian complex, with 3,000 hotel rooms and an indoor St. Marks Square, complete with gondolas also boasts a million square feet of meeting and exhibition space, a capacity for 50,000 people and 5,000 booths. A condition for developing is that casino operators must invest in convention space, despite the fact that these may not realize profits.

SHELDON ADELSON, CHAIRMAN & CEO, LAS VEGAS SANDS CORPORATION: The benefit of a convention center is to bring economic development to the community so people come in and they spend a lot of money to be there, so it brings in new incremental money to the city. However, something has to subsidize the losses of the convention center and that is the casino.

MACKIE: Gaming today also accounts for 70 percent of the government's total tax revenues, but Macau's strategy is to attract more conventioneers who tend to stay longer than Chinese day trippers and so boost more sectors of the economy. Opening in phases over the next seven years facing the Venetian is the Cotai strip, which will double Macau's number of hotel rooms, currently 16,000, add a further million square feet of casinos plus more huge halls for conventions. Macau may lack the maturity of more established destinations, but it's clearly on a roll, undergoing a major transformation from a once sleepy gaming backwater to a high end integrated resort, with top brand shopping, conference and trade fair facilities and class act entertainment. Gambling of course, is the big draw. And Macau is banking on the throw of the dice to boost its share of the high rolling business traveler market. Unlike Las Vegas however, Macau has seasoned competition for the business buck just a one hour ferry ride away. Hong Kong is an international trade hub with a truly international airport. And though some corporate events will inevitably try Macau, the former British colony could profit as it's so close to the gaming tables.

MIKE ROWSE, DIRECTOR GENERAL, INVEST HONG KONG: To some extent Macau adds to the attraction of Hong Kong. The people are going to be putting events, they're going to be putting exhibitions and conventions in Hong Kong in part because Macau is so close. So, they'll still come here to do business. Macau is not really a business city.

MACKIE: Well, not if you exclude gambling. The business of gambling is why companies like Sands, Wynn and MGM Mirage are here and anticipating expansion elsewhere in the east. Singapore will have its own $3 billion Sands development in 2009. While Japan and Thailand are expected to overhaul their gambling laws to allow foreign operators and the big U.S. names are waiting to pounce. Nick Mackie, NIGHTLY BUSINESS REPORT, Macau.