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In a tiny corner of China, a gamblers' paradise spawns glitzy, ritzy, gargantuan casinos

MACAU -- This small city-state’s transition from sleepy Portuguese colonial backwater to insomniac Asian Las Vegas, where the dice roll hot and China’s new elite play is well advanced, but not complete.

Nearly 450 years of Portuguese rule have left a strong impression on the southern Chinese landscape, a hallmark that Macau’s new rulers, the casino magnates bustling in from Nevada, Hong Kong and Macau itself, have yet to fully erase.

Made up of two islands and a peninsula on the edge of China, Macau is place where it is hard to escape numbers -- be they roulette-table odds, figures issued by gambling conglomerates detailing their plans for the enclave, or the dollar earnings figures from the tables in its casinos.

The sleepier side to the enclave is still around; you just have to look harder. Portuguese and Chinese are the two official languages, signs along still-winding streets are in both tongues, and dotted around is the colonial, neo-classical architectural style seen in other former colonies like Brazil.

Macanese food is delicious and inventive, incorporating Chinese, Portuguese and African cuisine, with a dash of the Indian spice from Goa thrown in for good measure, and the local Cantonese food is also terrific. The favorite local tipple is SQ vinho verde, the Portuguese white wine with a greenish tinge. Portuguese civil servants still sit in the quieter cafés around the SQ Leal Senado central square sipping excellent Old World coffee and eating pastries just like in a Lisbon hostelry. Leaving the café, you climb steps to get to SQ St. Paul's church, which was built by the Jesuits in the 17th century, although only the façade remains today.

If Old Macau represents a true fusion between European traditional ways and Chinese culture, add some Vegas glitz to the mix and you get the New Macau. A swift taxi ride away, inside casinos branded by big Vegas names like Sands or Wynn’s, the atmosphere is the giddying blend of excitement, disappointment, fear and triumphalism that gamblers recognize from gaming houses all over the world.

In recent years, corrupt officials have thrown away billions in the casinos of Macau, and Beijing is trying to stop this as part of a broader crackdown on graft in China. Party officials gambling in Macau are known as “ganbulers”, a pun on the Chinese word for cadres.

At one baccarat table, a middle-aged Chinese woman shrugs off the loss of nearly $12,000 on a single game. She restacks her chips and gets busy, the ash on her cigarette barely trembling. With no windows letting in the light, the cheers go up when a high roller is winning. When a small-time mug loses another $50 on the baccarat tables, the room doesn’t register the loss.

“Macau over the next few years is going to develop into something quite unique and will neither be a replica of Las Vegas, Atlantic City or Australian gaming,” says SQ Ciaran Carruthers, senior vice president of the Hong Kong company, Galaxy Resort.

Claiming 22% of Macau’s gambling market, the Galaxy group owns the Grand Waldo, which has the distinction of being the first resort to open on the Cotai Strip, a neon alley of casinos, hotels and shops on 200 acres of reclaimed land that connects Taipa and Coloane off the southern Chinese island. Cotai is the single biggest tourist investment to date anywhere and its backers are betting the development will steal the jackpot from Vegas to become the world’s gambling epicenter.

And these backers should know because they are the men who build Las Vegas. Both Sheldon Adelson SQ of Las Vegas Sands and gambling mogul Steve Wynn SQ have recently built huge casinos in Macau and are among the main drivers behind the Cotai Strip. Where Las Vegas beats Macau hands-down is on non-gaming income -- in Vegas people stay longer, spend a lot more and gamble a lot less. Nearly three quarters of all money spent in Macau goes on gambling, whereas in Las Vegas, gaming makes up just 41% of the spend, with the rest going on hotels, food and entertainment.

The leisure kingpins are looking match the success of Las Vegas in wooing non-gamers to town and that’s where Cotai comes in.

Out on the Cotai Strip you can see emerging from the silt a gargantuan replica of the Doges Palace in Venice, with a huge statue of the archangel Gabriel on top. The SQ 39-storey Venetian Macau, with its 3,000 suites, is the Sands’ contribution to the Cotai Strip and is billed as the largest hotel-casino in the world.

As the first foreign firm to come to Macau, Sands is leading the push into Macau. It operates the Venetian resort and the Sands Expo and Convention center in Las Vegas and opened its first Macau casino in 2004. The Sands upper floors are extremely tasteful, the Shanghai Room spectacular with its view over the floor where people are busy playing baccarat, blackjack and the slot machines.

Croupiers are dealing, rolling dice and spinning the roulette wheels as mainland Chinese gamblers take their chances on the green baize. The casino is so successful that it paid for itself in its first year.

Steve Wynn has come to the game later but certainly doesn’t lack for ambition in Macau. Jets of fire and water from a spectacular fountain, and Frank Sinatra singing “Luck Be A Lady”, greet would-be high-rollers as they enter Wynn Macau, a $1.2 billion resort Wynn opened in September last year. Renoirs and Picassos are on display, while the malls are lined with Chanel, Prada, Christian Dior, Fendi and Louis Vuitton, as statues of camels lope through the swimming pools. Not your regular gambling den.

“This place will go profitable tomorrow, on its first day. It'll take that long,” Wynn told reporters at the launch ceremony, wearing a tee-shirt which said “Knowledge destroys Fear”. “In Macau, the invitation has been rather one-dimensional -- just gambling. Now the invitation is being enriched at a pace not seen in any other destination in the world. The speed of development is dizzying,” said Wynn, who as head of Mirage Resorts, transformed Las Vegas before selling the company and starting from scratch with Wynn Resorts.

The investment bank Merrill Lynch has estimated that between 2007 and 2010, $20 billion of new capital will have been injected into Macau, compared with the $33 billion the Nevada State Gaming Control Board has calculated exists on the Vegas Strip today.

Dubliner Carruthers wears a sober suit as he shows around the Grand Waldo, a large new casino with 168 tables and 334 slot machines, as well as restaurants, retail space, a luxury hotel, spa, nightclubs, a fitness centre and swimming pool. There’s even a children's playground and inevitably for a casino targeted at the Chinese market, karaoke facilities. You hear the distinctive Chinese dialects of Fujian, Beijing and Shanghai, both spoken and sung. This is a playground for mainland Chinese gamblers.

Macau is the only place in China where casinos are legal and this huge gambling spend from across the border is the reason Macau has overtaken the Las Vegas Strip in terms of gambling revenues. “How Macau changes and develops will be very closely linked to the change and development in China. Right now most of our players are from the middle and lower classes in China, and it is the every growing middle class that will drive growth here,” says Carruthers.

Looming over Macau’s development like a powerful god of Greek legend is octogenarian tycoon Stanley Ho, who kick-started Macau’s development as a gambling venue. Ho’s company SJM opened the 12-storey circular tower of his flagship Casino Lisboa in 1970. Thus began the 24/7 gaming experience that marked a revolution in gambling in Asia and earned Dr Ho mythical status in the city, where he owns 17 casinos.

The core of his operation was always the labyrinthine Lisboa, a hard-core gambling venue where VIPs would fly into its high-roller rooms by helicopter, and people can win or lose three or four million dollars in a day. Legend has it that one punter lost over $100 million in a single game of baccarat.

Stanley Ho’s monopoly ended in 2002, when the government began offering concessions to outside investors. He’s losing market share, analysts say, but it’s a market this growing rapidly. And in case anyone tries to write off the legendary Dr Ho, they need only look at the opening in February of the $385 million Grand Lisboa to see the SQ 85-year-old’s ambitions have not been dulled by outside competition.

The Grand Lisboa is a 44-storey building shaped like a lotus flower, which Ho built in joint venture with MGM Mirage. It’s Stanley Ho’s riposte to the arriviste Las Vegas crew, and it’s already luring thousands of gamblers.

“We are the leaders, not the followers,” he said at the launch. “We know the city well.”

Casinos make up 80% of economic activity in Macau, and gambling revenue rose 23% last year to $7 billion. By law, only people from Macau or those with a special permit may work in the casino.

A world without windows leads to a disorientation familiar to fans of Vegas and Atlantic City. In Macau, it’s still possible to track down a few plates of dim sum for breakfast when you emerge, blinking into the bright southern Chinese sun. Just hope you have enough chips left to pay for it.

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