All to play for

 

MACAU: It’s best known as a gambling hub for mainland China but Macau is changing its game with a host of new attractions – including some run by Irish people – and hypermodern integrated resorts, writes CLIFFORD COONAN

DEEP IN THE heart of Macau’s Venetian casino, a few hundred metres away from where Chinese gamblers are dropping millions of dollars on the green baize, chasing dreams of untold wealth, the legendary jazz guitarist George Benson is telling a rapt audience that he’s Irish.

We have a spiritual moment in the casino concert hall as he launches into a smooth, transcendent version of Danny Boy.

Macau is changing again. From a sleepy Portuguese colonial backwater, Macau was transformed in the final decades of the 20th century into a gambling hub for mainland Chinese. The next stage of its transformation is now in full swing, as Macau chases China’s growing middle-class dollars with new integrated resorts.

The numbers are astounding: Macau’s casinos raked in €27 billion last year and this is expected to increase to about €32 billion this year.

The middle-class Chinese that are crucial to keeping these numbers up and running, laugh and joke at the bus stops outside Sands, the MGM Grand, the Grand Lisboa and Wynn, where there are signs saying “To Border Gate”. They will head back to the mainland via Zhuhai, or back to Hong Kong.

Arriving in the other direction, the mainlanders are hoping that the dice roll hot. For those that don’t make it on the tables, the windows of the pawn shops at street level are full of Rolexes hocked to get the cash for the next flutter at the tables.

Gambling has been legal in Macau for more than 150 years, and it is the only place on Chinese soil where table gaming is permitted. Among those betting on building a different experience in Macau is Niall Sean Murray, a Dubliner who is a director of operations development at gaming operator Sociedade de Jogos de Macau (SJM), the biggest casino company in the region, which is owned by Stanley Ho, dubbed the “King of Macau”.

“At this point, more than 90 per cent of revenues are from gaming, while in Vegas, 60-70 per cent is non-gaming. There will be a move in Macau but it will be over time. There are still a lot of first-time visitors here whose intention is to have a game,” says Murray, as we walk through the Grand Lisboa, the SJM flagship on the Macau peninsula.

Murray has years of experience in both casinos and food and beverage, having studied at Cathal Brugha Street in Dublin. Over the years he has worked in Las Vegas and for Disney in France.

Ho is an almost mythical figure in this former colony. He made his fortune smuggling goods between China and Macau during the second World War. His exploits are legendary – his boat was once captured by pirates, and the crew killed, but he managed to take a gun from his captors and seize his vessel back.

Sometimes separating the myth from the man is difficult. He was in the news when a family feud over who would inherit his considerable wealth became public. Ho accused two of the four women he calls his “wives” – his legal wife, Clementina, died in 2004 – and some of his 16 children of trying to seize control of his company. A truce was eventually reached.

Inside the casinos, just like in Vegas, it is always night. There are no windows and nothing to tell you what time of day it is, until you emerge blinking in the balmy heat of the southern Chinese enclave. The lobby of the Grand Lisboa is dotted with large works of traditional Chinese art, some carved statues in solid gold. There are a fair number of gawkers but the key is always to get people into the casinos, then you work from there.

“Some elements will always be revenue earners, and some will be break-even. It’s like this art in the front lobby. It’s about getting people in, giving them an amazing experience and making them want to stay longer. In many ways a casino is like any other casino, so you have to differentiate between them. You need to have good stuff there. The goal is to extend the stay,” Murray says.

Lunch in the Don Alfonso 1890 restaurant in the Grand Lisboa is brought to you by southern Italian Michelin-starred chef, Alfonso Iaccarino, who offers specialities from his native Sant’Agata sui due Golfi, which is on a ridge above the Bay of Naples.

More than 70 per cent of the ingredients are flown directly from his family’s organic farm, and the fish is sourced in Japan’s top fish markets. The wine list is presented by sommelier Roberto Gallotto and the tome is so thick it needs its own stool to rest on. Ho’s wine collection is reckoned to be worth at least $1 billion.

The Grand Lisboa is a complete departure from the old flagship Casino Lisboa, which has scores of prostitutes circling the shops in the basement, and the gaming rooms are smoky, dark and undeniably atmospheric. On the top floor of the new Grand Lisboa you find the Robuchon a Galera, whose chef Joel Robuchon was named “Chef of the Century” by the influential French restaurant guide, the Gault Millau. Here you will find nearly 3,000 wines and the room is decorated with models of the great chateaux.

From here you can see how Macau has grown, expanded beyond the old into the hypermodern. The facade of St Paul’s church, built by the Jesuits in the 16th century, which looks even older than its 450-odd years, almost prehistoric, when juxtaposed against the burgeoning casino landscape.

Out in the water, engineers are building the Hong Kong to Zhuhai to Macau Bridge, a 29.6km six-lane carriageway which will connect these three major cities of the Pearl River Delta. When completed in 2016, it will mean you can drive between Hong Kong and Macau in 40 minutes.

There are 28 million visitors a year to Macau, and this is expected to rise to 50 million in the next few years. There are about 20,000 hotel rooms now, compared to 150,000 rooms in Vegas. High-spending Chinese gamblers make up 70 per cent of revenue, but their spending is dropping, analysts say.

This is a tough one for Macau to deal with, because the market has always been about high rollers, the VIPs who can drop a million at a table without the ash on their cigarettes trembling. But the VIP side of the business has been hurting.

There has been much tighter control on corruption in public life in China, which means fewer bent officials spending public funds in Macau. The territory’s fortunes tend to rise and fall depending on how many visas for mainlanders are being issued.

Last month, Yang Kun, a senior executive at one of the mainland’s big four state-controlled banks, Agricultural Bank of China, was detained amid a widening investigation into allegations of illegal gambling in Macau and the misappropriation of clients’ money.

Also, junket operators traditionally give the high rollers credit based on the value of their property portfolios, but the end of the real estate boom has seen this kind of credit fall off.

However, where the high-rollers are falling off, the number of middle-class Chinese is on the rise. The baccarat tables are packed with moneyed mainlanders.

Central to Macau’s transformation vision is a narrow piece of reclaimed land called the Cotai Strip, will be the Asian equivalent of the Las Vegas Strip when fully developed. Here, local and international casino operators are spending billions on resorts that combine casinos with shopping centres and entertainment venues to try and woo middle-class Chinese.

Billionaire Sheldon Adelson, chairman of Las Vegas Sands, opened his latest €3.5 billion casino on the Cotai Strip last month. He already has the Venetian here, a hotel and casino resort with 3,000 suites on 40 storeys. The casino has 800 tables and, if you want, just like in Vegas, you can take a ride with a Venetian gondolier.

Adelson’s rival, Steve Wynn’s Wynn Macau, says it has been given the go-ahead to develop a 51-acre plot on the Cotai Strip. Ian Coughlan, the president of Wynn Macau, is from Clare. Both Adelson and Wynn already have casinos on the main Macau peninsula, along with SJM. Others operating the 25 casinos in Macau include MGM China, Galaxy Entertainment and Melco Crown.

Murray is putting together a development proposal for the Cotai Strip to submit to the government which, if approved, would bring substantial new non-gaming attractions, such as amusement parks, and non-gaming amenities like restaurants, with a heavy retail element as well as a cultural aspect, focusing on Asian and Macau cultures. “The government is very focused on the non-gaming elements,” he says. These new elements include events such as the George Benson concert, and Beyoncé has been here too.

The new Wynn project will include a convention centre, a lake, 40 shops and a 1,750-seat theatre, all fitting in with the government requirements that new resorts need to have a heavy non-gaming element.

A new, permanent show, the spectacular €210 million “House of Dancing Water”, is an acrobatic show designed by Franco Dragone, and it’s the centrepiece of the City of Dreams, directly opposite the Venetian. The pool is one of the largest commercial pools in the world.

This kind of show is crucial to getting more Chinese punters to do something other than gamble, and this has seen a surge in the number of Canto-pop stars (pop sung in Cantonese), as well as Mandarin stars from Taiwan and even K-Pop, or Korean pop stars, who are popular with Chinese fans.

Murray believes that the transformation of Macau offers huge opportunities for Irish companies. “The biggest industry is gaming and hospitality. For any Irish business that serves these industries, it’s a great opportunity,” he says.

He starts to list all the possible areas Irish companies could thrive in Macau: foreign exchange, premium food and beverages from chocolates, prime beef to spirits. “Each integrated resort is like a city in itself. When I look at the list of things we have to buy every week, it is endless, and the quantity is amazing. On the construction side, even if you missed the first wave, these resorts will all be refitted in five years,” he says.

With this in mind, he recently set up the the Irish Chamber of Commerce of Macau (ICCM). On the board of supervisors are president Frank McFadden, a Belfast man who also works in a senior role at SJM, gaming consultant Ciaran Carruthers and local entrepreneur Bill Condon, as well as local notables.

Carruthers, also from Dublin, has several businesses in Macau, including the Asia Pacific Gaming Consultancy, a blues bar called the Roadhouse, and an online media service that targets people getting off the planes with the latest information on where the big jackpots are.

“I’ve been in Asia for 20 years and in Macau for 10. I’ve been a casino guy for 20-plus years and I’m enjoying the challenge. Casino management is my core business. The hospitality business in Macau is incredibly strong, but it’s in its infancy. There is great expertise at home that could be brought to bear here,” says Carruthers. “It’s safe here, and it’s a lot more cosmopolitan than it was even 10 years ago. Back then, shopping here was difficult, but now you’d be hard-pushed not to find what you’re looking for.” Carruthers also has interests in the Philippines and is planning to expand his casino management business to Manila early next year.

“Macau is so lucrative with legitimate money. It’s got a long way to go, it’s still mostly about gambling and adult entertainment, but now the integrated resorts are attracting a whole new demographic, a wider audience. It’s becoming an attractive proposition for visitors. Gambling won’t be the be-all and end-all that it used to be.”

Bill Condon, an entrepreneur with more than 20 years experience in Asia, is the founder and chairman of the Multitude Foundation, a Hong Kong registered charitable trust with a remit to support contemporary art in Asia, and is founding member of the Irish Chamber of Commerce of Hong Kong.

“Macau offers Irish companies a less challenging and very lucrative entry point to the Chinese market, particularly the lucrative Pearl River Delta,” he says. Condon prefers the older parts of Macau as opposed to the bright lights and glitz of the Venetian or Sands.

“Macau has a rich culture and some truly wonderful Portuguese restaurants and thankfully it only takes a short journey to find some real gems. Macau has always been popular with Hong Kongers craving the slower pace and relaxing atmosphere that can still be found there,” he says.

In truth, there are two Macaus, as Condon says, the sleepy Portuguese version which still exists around Senado Square, the old centre, and then there is the hectic casino side of things.

Wandering through the narrow streets off Senado Square, you can stop for a great cup of coffee and watch Portuguese residents shake hands and exchange pleasantries at a European pace: unhurried. Then you are out on the boiling streets again, the cards with the pictures of girls and phone numbers offering prostitution services start to take over again. The streets are littered with these cards.

It’s not all going to be smooth sailing for Macau. There are regional rivals shaping up – Singapore, the Philippines and Vietnam are staking claims to regional market share, with several mega-resorts already running or in the pipeline. But Macau’s capacity to continually reinvent itself means it is always worth taking a bit of a gamble on.