The First Guide to Macau & Cotai Casinos

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The boss sent Chuckmoster to Macau to see what the deal was with Asia's Las Vegas. He returned smitten and poured his love it into creating the world's first guide to Macau casinos. This was his blog until we invited long time contributor and Macau expert Dramman join the team. Hi.

SJM's Cotai Land Grab Bitchslap

I got a bad feeling about this...

The news is abuzz about a recent move by SJM, they are requesting the rights to something esoterically called "sites 7 and 8" on Cotai. Let's put a face on this problem. The piece of land in question was commonly called here on MacauTripping the "Hilton/Conrad/Raffles" site. This picture shows the site as it existed about a year and half ago.

To understand how SJM can request the site, takes some explanation as to how things actually work in Macau. Macau's legal system makes land transfers expensive and time consuming, and so incompatible with a modern boom town. As such what is going on is the SAR reclaims the land, and makes informal promises and agreements on the development, construction begins, and some point later the legal transfer occurs.

So currently we are in the early stage. The government and Sands have made some agreement over the site, and that included a promise of construction. SJM is basically saying now that Sands has not constructed on the site as promised, and thus the agreement is void, and SJM now wants to take over as the new promissory.

The better story here is this could be a rather public test for Stanley Ho's SJM and how well they are able to leverage their behind the scenes contacts. Personal contacts are very important to China business, and this could be the chance for SJM to play this card, one they seem to have been withholding for some time. As the monopoly for years, SJM certainly has the right contacts and influence to make a good effort to get this done.

Meanwhile, who knows what the status of Sands contacts are with the Macau government. They were certainly close with the start of the whole Cotai project. However the relationship has seemed to sour some with the Marina Bay Sands, and Sands's construction delays (of which this is part of). This could give Macau enough of an excuse to let SJM's social magic work.

More importantly though, this could be a tectonic shift in Macau's local identity. SJM has never really made much of a play for Cotai before. SJM has their fingers in a few places, but never have they actually made a commitment to the area. Now SJM wants a prime piece of land in the center of the whole development. It seems like Macau's old institutions are no longer writing off Cotai as Uncle Sheldon's crazy boondoggle.

Revenue Up, But Some Got The Short End

The big news from Macau is gaming revues are up 40%, and happy days are here again. This is a bit of a dog-bites-man story. It is notable for some because of the more sedate growth last year. The real story though is in piecing together the details.

A common refrain is the claim that revenue is driven by VIP business. Extending that out to other numbers though raises some questions. MICE (Meetings, Incentives, Conventions, and Exhibitions) visits were up 18% this year so far. Meanwhile tourism arrivals in general are up 23% this year. To think these notable improvements are not incidental to gaming growth, as some readings would have you believe, is a little illogical.

Macau Takes Some Bets Off The Table

A large theme this summer in Macau has been decreasing the role of gaming in the economy. I think this drive is one of the reasons for the recent Taiwanese visit to the SAR. It gave Macau a bit of non-gaming news for once. The move is kind of odd for a place that once billed itself as the Vegas of Asia, a city, arguably, founded on gaming and proud of it.

The details can be found in this article that came out in the spring. In short Macau will only allow 500 more gaming tables, yet the casinos to be opened up next year are designed for 1,300, or 800 tables short. This leads to another problem. The casinos are being developed by two companies, Galaxy Entertainment and Las Vegas Sands Corp., officially dividing the limited tables to them will be a whole bailiwick of hurt feelings and bad press.

Macau's New Visa Problem

Local economy got you down? Tired of the double-digit unemployment in your home economy? Don't like living in those freezing winters? Well my friend, move to sunny Macau. The subtropical climate creates an endless stream of beach weather. More importantly, the unemployment rate is already a low 2.9% . Plus, the casino companies have restarted their major projects. Sands and Galaxy are working on their mothball projects. Wynn and MGM are beginning to get serious and plan for their Cotai resorts. Come work in Macau! Oh wait you can't, your not Macanese.

The Macau SAR government is getting rather picky who people hire in the current boom. This is a familiar theme for Casino operation, as companies were required to hire Macau residents for many jobs, particularly in operations. Yet the problem is stretching to other areas. The SAR has cut their foreign workers by a third over the past two years.

Welcome Dramman!

I've been hoping for a long time that this day would come. We've finally managed to wrangle long time MacauTripping contributor Dramman to join our staff as dedicated Macau/Cotai correspondent.

As many of you know, Dramman (short for Drambuie Man) witnessed the growth of Macau's casinos from SJM monopoly to the fantastic growth of 2007 and the busts of the last few years. He was one of the first heavy craps players to be rated at Macau's tables and was one of the first visitors to the Venetian, Wynn Macau, MGM Grand and City of Dreams.

Harrah's Macau Strategy

Harrah's Entertainment Asia boss Michael Chen, who by all accounts is little more than a golf pro at the Cotai Country Club, has unveiled Harrah's strategy to get into the lucrative Macau gaming market.

Patience.

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