Macau Hits the Jackpot- page 2 | Travel | Smithsonian
A view of Macau at night and the tail of the Dragon's bridge show a skyline full of potential and color as buildings continue to arise on reclaimed land (Justin Guariglia)

Macau Hits the Jackpot

In just four years, this 11-square-mile outpost on the coast of China eclipsed Las Vegas as gambling's world capital

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(Continued from page 1)

Macau's prospects changed little over the next two decades. Despite Ho's casinos, visitors numbered about 7 million a year to Hong Kong's 11.3 million in 1999. Almost half the hotel rooms were empty. Gangland murders occurred with numbing regularity. For much of that time, Macau's gross domestic product grew more slowly than Malawi's.

But in 1999, the year Portugal formally handed administration of Macau back to the Chinese, the city became a "special administrative region," like Hong Kong after the British turned it over two years earlier. The designation is part of China's policy of "one country, two systems," under which it allows the newly reunited entities autonomy over their own affairs, except in foreign policy and national defense. In 2002, the new Macau government ended Ho's 40-year gambling monopoly and allowed five outside concessionaires, three of them American, to build competing resorts and casinos that would both reflect—and accommodate—China's growing wealth and power. Beijing also made it easier for mainland Chinese to enter Macau.

"China wanted Macau to have growth, stability, American management standards and an international appreciation of quality," says the director of the city's Gaming Inspection & Coordination Bureau, Manuel Joaquim das Neves, who, like many Macanese, has Asian features and a Portuguese name. "Beijing also wanted to show Taiwan that it is possible to prosper under the Chinese flag."

When the Sands casino opened in 2004, the first foreign operation to do so, more than 20,000 Chinese tourists were waiting outside. Stanley Ho—who rarely gives interviews and whose office did not respond to a request for one for this article—was not amused. "We are Chinese, and we will not be disgraced," he was quoted as saying at the time. "We will not lose to the intruders."

The newcomers set the bar high. A mere 12 months after opening the Sands Macau, the Las Vegas Sands Corp. had recouped its $265 million investment and was building a grander emporium, the Venetian Casino and Resort Hotel. At 10.5 million square feet, the $2.4 billion complex was the largest building in area in the world when it opened in 2007 (a new terminal at Beijing's airport surpassed it this year). Its 550,000-square-foot casino is three times larger than Las Vegas' biggest.

This year, Macau is on track to draw more than 30 million tourists—about as many as Hong Kong. At one point, so many mainland Chinese were exchanging their yuan for Macanese patacas that banks had to place an emergency order for more coins.

Macau's casino revenues for 2008 are expected to be 13.5 billion, 30 percent more than last year. By 2012, they are projected to outstrip the revenues of Atlantic City and the state of Nevada combined. With a population of just 531,000, Macau now has a GDP of more than $36,000 per capita, making it the wealthiest city in Asia and the 20th-richest economy in the world. Says Philip Wang, MGM's president for international marketing: "It took 50 years to build Las Vegas, and this little enclave surpassed it in four."

And it did so despite its unusual relationship with China's communist rulers—or, perhaps, because of the rulers' unusual relationship with capitalism. On one hand, the Chinese government is so hostile to gambling that it prohibits Macau casinos from advertising even their existence in Chinese media. On the other, having such a juggernaut on its shores serves China's development goals. (All casino taxes—35 percent of gross revenue, plus 4 percent in charitable contributions—go to Macau.) Says MGM Mirage International CEO Bob Moon: "We're working with China to move the Macau business model beyond day-tripping gamblers to that of an international destination that attracts sophisticated travelers from the four corners of Asia."

This modern magnet was once called "The City of the Name of God in China, No Other More Loyal," at least by the Portuguese, after Ming dynasty Emperor Shizong allowed them to set up an outpost here in 1557. Jesuit and Dominican missionaries arrived to spread the Gospel, and merchants and sailors followed. Macau quickly became a vital cog in the Portuguese mercantile network that reached from Goa, on India's Malabar Coast, to Malacca, on the west coast of the Malay Peninsula, to the Japanese city of Nagasaki.

The Jesuits opened the College of Madre de Deus in 1594 and attracted scholars throughout Asia. By 1610, there were 150,000 Christians in China, and Macau was a city of mansions, with Portuguese on the hills and Chinese living below. Japanese, Indians and Malays lived beside Chinese, Portuguese and Bantu slaves, and they all rallied to defeat the Dutch when they tried to invade in 1622. There was little ethnic tension, partly because of intermarriage and partly because the Ming rulers, having never relinquished sovereignty, had a vested interest in the city's prosperity.

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