INDUSTRY INSIGHT: 
Macau
The Las Vegas of China
Macau (also spelled Macao) is a small two part island, 1/8th the size of Las Vegas, located at the southwest tip of Mainland China. About an hour hydrofoil, or high speed ferry, away from Hong Kong, Macau’s allure is growing second by second as China’s only casino city raked in $10.3 billion in gambling revenues last year. That figure is up 46% from 2006.
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Macau hasn’t always been this successful and is still working on its prestige and appearance. This once known escape for prostitution and corruption has finally turned the proverbial corner.
China regained control of the island in 1999 from the Portuguese, just two years after they took back Hong Kong from the British. The Chinese kept Macau a Special Administrative Region (SAR), giving only it and Hong Kong certain independences from the governance of the People’s Republic. This freedom has allowed Macau’s government to finally issue gambling licenses to outside developers like Sheldon Adelson (Las Vegas Sands), Kirk Krekorian (MGM Mirage), and Steve Wynn (Wynn Resorts).
Adelson was the first outsider to break ground in the territory, once monopolized by Chinese Billionaire Stanley Ho, and he opened The Sands Casino in 2004. Adelson publicly exclaimed, “What took us 25 years to do in Vegas, we will do in Macau in three”. This quickly set the precedent for the explosion of development to come.
Last year alone, the Wynn, Venetian, and MGM all opened their doors and with a swagger and directive that Macau had never seen. The biggest, best and the pinnacle of upscale, The Venetian Macao prides itself on being the largest casino in the world and the second largest building behind only a Boeing passenger jet facility in Washington State. There were two NBA exhibition games held on the premises but as much as these Casino Royale’s encourage Western travelers, they are getting a lot of their support from the 3 billion people within a 5 hour plane flight of the island.
The wealth in that area of the world is growing, almost as fast as Macau. The island is now known to be the fastest growing place in the world with over 50% of its GDP from gambling revenues. Analysts report that over half of last year’s gaming revenues, about $6.9 billion, were from high stakes rollers at the baccarat tables. High rollers typically spend at least 500,000 patacas or $62,000 on betting each trip.
With Macau’s steadfast casino expansion, they have been forced to get creative with residential building as well. There are not only luxury high-rise condos being built, but for those needing more seclusion and space, villas have become more popular as the amount of residents and investors grow. The real estate firm Jones Lang LaSalle estimates that 25,000 residential units will be needed in the next three years and only 19,256 will become available. Current prices for upscale living in Macau ranges from around $500 to $1500 dollars a square foot which might seem pricey compared to American standards but is actually only of fraction of real estate costs in nearby Hong Kong.
So whether you are traveling, investing, or just trying to find a use for Google Maps, Macau is a place of both intrigue and excitement.
