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Wynn rises in the eastTriad violence, rivalries mar Macau's growthMacau's evolution into the gambling capital of the world is happening faster than expected. Stock analysts now routinely predict that the former Portugese enclave's casino revenues will surpass the Las Vegas Strip this year, to the tune of $7 billion, if they haven't done so already. At the same time, the market share held by Macau's casino oligarch, Stanley Ho, has shrunk more rapidly than predicted. South China Finance & Management, for one, had projected Ho's slice of the Macau market -- which his Sociedade de Jogos de Macau (SJM) once had entirely to itself -- to dwindle to 60 percent by 2009. Recent news reports, however, now peg Ho's market share at between 66 percent and 70 percent, compared to the 21 percent now held by Sheldon Adelson's Sands Macao and the 13 percent enjoyed by Galaxy Entertainment. If Adelson's incursion into the Macanese market is impressive, then it is doubly so considering that it was accomplished with only one casino (albeit a casino with an unprecedented 740 tables) compared to Galaxy's three and Ho's 17.
Wynn's debut was pronounced a success by Morgan Stanley analyst Celest Mellet Brown, who reported to investors that, "As expected, the Wynn Macau has changed the standards in the market and we expect the property to be successful and relevant for a long time." That's no consolation to Ho. The former casino monopolist is crying foul, saying that Sands has captured so much VIP trade -- long Ho's strong point -- that fully a third of his 150 high-roller salons (run by subcontractors) were threatened with bankruptcy. MURDER, KIDNAPPING AND INTIMIDATION Ho decried Sands' competitve strategies as "cutthroat" -- an unfortunate choice of words, as events turned out. On August 18, police came across the dead bodies of VIP-room operator Chao Yeuk-hong and her husband, on the Zhuai golf course, near the Macau border. Yeuk-hong's throat had been slit and her spouse was stabbed to death -- the first slaying of a casino boss in a decade. Yeuk-hong, aka "Sister Cat," was executive director of the Golden Palace salons at Ho's Casino Lisboa. The double murder aroused fears of resurgent triad activity in Macau, where gangs are reputed to exert heavy influence in the city's private gambling rooms. They are also notorious for their loan-sharking activities and, 10 days after the "Sister Cat" slaying, Macau police nabbed a trio of loan sharks. The trio was holding a Chinese gambler hostage, in a dispute involving gambling debts. "It has long been believed by those on the ground (in Macau) that Ho's casinos were infiltrated with triad gangs with ties to the VIP-room subcontractors and junket operators," elaborated James Rutherford, overseas editor for International Gaming & Wagering Business. "Beijing maintains a garrison on the peninsula, and from what I've read the triads now keep a low profile." The hand of the triads was also perceived behind the beating and death threats aimed at pro-democracy advocate Albert Ho. The anti-triad crusader was beaten in front of 150 witnesses at a McDonald's restaurant in Hong Kong. He suffered a detached retina and broken nose but to date, no one has been apprehended. Stanley Ho and his sister Winnie are at loggerheads over the latter's attempt to block SJM's $1.9 billion IPO, and Albert Ho (no relation) is Winnie Ho's attorney in the lawsuit. The casino magnate said it was "absolutely impossible" that any of his underlings could be implicated, adding, "I have never met (Albert Ho). You don't say I know a person by just having seen him on TV." The attorney subsequently received a death threat, as did two other legislators known to hold pro-democracy views. Civil liberties have been a contentious issue in Hong Kong since the advent of Communist Chinese rule in 1997. A BLOODLESS WAR If the first evolutionary stage of Macau's casinos were Stanley Ho's properties -- described by CNN.com as "smoky, dingy venues ... far from the glitz and sparkle of Las Vegas" -- then the second stage was the more mass market-oriented, amenity-driven Sands Macao. In public statements, Wynn Resorts CEO Steve Wynn has made it clear that he intends his newest property, with its large complement of restaurants and high-end retail, to be the third. "The Sands was an interim stage," Wynn said on opening night. "Sort of the Jai Alai Casino (a local grind joint) redone in a modern way. It's performed well financially but in no way does it represent the future of this city." Las Vegas Sands CEO Adelson might well agree with that last statement. His focus has moved on from the Sands Macao to the multi-billion-dollar Cotai Strip, where the Venetian Macao -- five times the size of Wynn Macau -- and a plethora of other Sands-owned casino-hotels are underway. He's also pitching resort projects further south along the Chinese coast and has even trademarked the phrase "Asia's Las Vegas." Adelson has also been aggressive in his pursuit of the high-roller. Ho took particular umbrage at the commissions Sands Macao has paid to junket organizers, charging Adelson with paying as much as double what Ho's company, SJM, did. He demanded government intervention. The junket agents are serious players: Wynn made international headlines by luring agent Phua Wei Seng away from Adelson. The Malaysian junketeer was credited with pulling in as much 36 percent of Sands Macao's VIP trade. An Adelson/Wynn repetition of the Sands-vs.-SJM commission wars appears remote, according to analyst Mellet Brown. She wrote, "it seems highly unlikely that Wynn would come into the market with the best product and strong ... relationships and pay higher commissions." Calls to Las Vegas Sands were not returned. As for MGM Mirage, company spokesman Alan Feldman said its strategy is to grow the Macau market, in part by building upon what Wynn and Adelson have done. At present, Macau is a day-trip market and the first step to solving that, according to Feldman, is by having more and better hotel rooms on tap. Expanding Macau's convention is another step, he added, saying that Macau "in no way, shape or form appears to be a market that's finite (and) which requires taking anything away from anyone." dmckee@lvbusinesspress.com | 702-871-6780 x319 |
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