Billionaire Stephen Wynn Gambles on $1B Casino Project in Macau

American billionaire Stephen Wynn will make one of his biggest gambles this week when he opens a sleek $1 billion hotel-casino in Macau - the booming Chinese territory that could soon bump off Las Vegas as the world's gaming capital.

Wynn is betting that his lavish rooms and trendsetting casino, which opens Wednesday, will attract the Chinese gambling masses eager to wager the money they've been raking in from the country's sizzling economy. But his critics doubt that the crescent-shaped Wynn Macau complex -- a smaller replica of his Las Vegas resort -- has enough attractions to be successful in this former Portuguese enclave on China's southeastern coast.

Macau, which returned to Chinese rule in 1999, is the only place in China that allows casino gambling. For 40 years, the industry was controlled by local tycoon Stanley Ho. But Ho's monopoly ended in 2002 when the government began shaking up the market and inviting new competition from Las Vegas.

Only two Las Vegas companies were allowed into Macau: Wynn Resorts Ltd. and Las Vegas Sands Corp. -- run by Wynn's arch nemesis, Sheldon Adelson. Sands -- the world's largest gaming company -- got established first in Macau, opening in 2004 the gleaming Sands Macau, which has been wildly successful.

Last year, Macau's income was about even with the $5.3 billion earned on Las Vegas strip, according to figures from both places. Many analysts expect Macau to surpass the Las Vegas strip if the new casinos prove to be a good bet.

To be successful, the newcomers must transform Macau into an Asian Las Vegas: a multi-day destination for people who want to shop, see shows, eat in fancy restaurants and attend conventions -- as well as gamble.

Macau has never been like this. It has been a seedy day-trip destination with old smoky casinos, prostitution and organized crime. It mostly pulls in high rollers from mainland China or Hong Kong -- just an hour east by high-speed ferry -- whose favorite game is baccarat played in private VIP rooms.
Chinese gamblers are notorious for being solely focused on gambling. They spend most their time at the tables and only take breaks for cheap meals or a quick trip to a sauna-massage parlor.

JP Morgan sounded bullish about Macau in a recent report. 'High quality new supply can create new demand,' the investment bank said. 'We believe new projects will attract new visitors, resulting in significant growth for the overall market.'

But in another recent report, Morgan Stanley was skeptical about the new casinos success in changing gambling and spending habits in Macau.'Simply adding facilities will not be enough as there are already good restaurants and hotels in Macau and Chinese gamblers choose not to spend money on eating and staying at those establishments,' the report said.