Inside Asian Gaming

Cotai’s Island Annex Las Vegas Sands ventures beyond the Macau frontier in its quest for more space. Before Macau commenced on its heady tourism and gaming-driven boom in 2003, international journalists describing the city unfailingly drew on the stock adjectives“sleepy”,“seedy”, and“tiny”in their reports. Macau is now decidedly not sleepy and reports on the city these days are dominated by its dynamic gaming industry,rather than its seedy side,which has become less visible and a lot less violent after China regained sovereignty of Macau in December 1999. However, Macau will always be tiny. Granted,it’s not as tiny as it was in 1912,when its land area was a mere 12.7 square kilometres.Through tireless reclamation of land from the sea,Macau’s land area has grown to 27.5 sq. km, and the government plans to expand that by a further 13%, or 3.6 sq. km, to 31.1 sq. km over the coming years. With 482,000 residents and a lot more on the way to staff the ambitious new casino resorts currently under development, Macau will remain the most densely populated place in the world.The government expects the 3.6 sq. km of land it plans to reclaim to accommodate up to 120,000 people. Much of the recent reclamation went into creating the Cotai Strip between Coloane and Taipa islands, intended to rival the famous Las Vegas Strip. Cotai could eventually house more than 20 resorts with 60,000 hotel rooms, or nearly half as many as in Las Vegas. US-based Las Vegas Sands (LVS) is spearheading the Cotai Strip with the US$2.3 billion 3,000-suite Venetian Macau,set to open inmid-2007.Yet LVS is keenly aware that more space is needed for holidaymakers seeking more than just Vegas-style shows and gaming. Sitting strategically adjacent to Cotai in Mainland China is underdeveloped Hengqin Island, with a mere 3,000 inhabitants but three times the land area of Macau to expand into. Hengqin belongs to Macau’s Mainland neighbour, the city of Zhuhai in Guangdong Province. At the moment, Hengqin’s only notable industries are a rock quarry and oyster farming. If LVS has its way, the island will soon become a fully-fledged convention- based, lifestyle destination resort to complements its entertainment developments on the Cotai Strip. In October, LVS announced it had been selected by the Zhuhai Municipal People’s Government to proceed with master planning the development of Hengqin, with a projected capital outlay of over US$1 billion.The Hengqin Island Resort development will occupy over 1,300 acres of land and feature a diversified mix of leisure, tourism and convention amenities including top-rate hotels and villas, convention facilities, a marina and yacht club, an outdoor amphitheatre, and golf, tennis, fishing, and other leisure and recreational activities. LVS President and COO William Weidner has signed a non-binding agreement with officials from the City of Zhuhai and Guangdong Province, the terms of which do not require the company to fork out any significant funds until further, more definitive plans take shape and subsequent agreements are reached with Mainland officials. A blueprint for the mega resort has started to take shape in anticipation of groundbreaking on the first phase expected this summer, marking the company’s maiden foray into the Mainland. According toWeidner,“The timing of the development fits perfectly with the development cycle as it relates to the construction of the Cotai Strip.” LVS may have been the victim of a sectoral bear market, with its shares trading at 45% below their highs at the end of 2004, but the company’s approach towards the Chinese market is nothing short of bullish.The opening of the Venetian Macau, adding 3,000 suites to Macau’s current stock of about 10,000 hotel rooms, will be a first indicator of whether that bullishness is prophetic, or merely misplaced. Where barren rock quarries now stand, Las Vegas Sands envisions a plush tourist magnet 29