Macao used to be a quiet Portuguese colony. Now it's Asia's breathtakingly brash answer to Las Vegas, writes Frank McDonald. This is Disneyland for adults with everything to lose
You expect to find Portuguese colonial buildings with grand loggias, footpaths paved in marble mosaic just as they are in Lisbon, branches of Banco Nacional Ultramarino, baroque churches and fountains, and children in convent-school uniforms. But nothing can prepare you for the shock of the brash new Macao.
It is ironic, looking at it now, that Portugal tried to give Macao back to China several times before finally handing it over, in 1999, to be run, like Hong Kong, as a special administrative region. Before that it was often over-run by triad gangs armed with guns and machetes. No wonder the Portuguese wanted out.
A Chinese Madonna may dominate the waterfront like a giant Buddha, but the big buildings on the skyline today are all casino hotels, and none is more extraordinary than the 44-storey Grand Lisboa, shaped like a lotus leaf, with shimmering gold-tinted windows and a bulbous entrance to eight floors of high-density gambling.
In the middle of its huge glitzy foyer, two bouncers in pink jackets - pink is a lucky colour in China - stand guard on either side of a glass case containing a 17th-century bronze horse's head from the Qing dynasty. A plaque says it was bought by Stanley Ho, a Macao casino mogul, for $9 million (€6 million). Either Ho has never seen The Godfather or he has and is just having a little joke.
Ho, who has been running casinos in Macao for years, likes to bring a bit of art to his premises. At the Grand Lisboa, which opened last year, Chinese gamblers crowd around gaming tables playing baccarat, blackjack and roulette.
Gambling has been legal in Macao since the 1850s, even though it remains illegal in mainland China. Previously run by a monopoly controlled by Hong Kong and Macao business figures - notably Ho - it was recently opened up to major casino operators from Australia and Las Vegas by a licensing round in 2002.
The Macao government, which earns 70 per cent of its revenue from gambling, wanted to regulate casinos by limiting their number. But the result was perverse. It turned out that if you got a licence for a new casino, you were entitled to create a sublicence for another one. As a result, casino gambling has mushroomed in Macao.
The three original licences were auctioned, going to Sociedade de Jogos de Macau, controlled by Ho; the Galaxy group, from Hong Kong; and Las Vegas Sands Corporation, run by Sheldon Adelson. Sands paid $700 million for its licence, then sold the sublicence to Steve Wynn, of the Mirage in Las Vegas, for $800 million.
Another sublicence went to Ho's daughter Pansy (he has 17 children), in a joint venture with MGM, which paid $209 million for its stake in the MGM Grand casino, which opened just before Christmas. Another went to Melco PBL Entertainment, a joint venture between the Australian casino magnate James Packer (son of Kerry) and Lawrence Ho - you guessed it, Stanley's son.
Packer controls the Crown casino group, in Australia, and has been selling some of his late father's publishing assets to raise money for further casino investments. And, in Macao, casinos are money-spinners. Indeed, it is said that Sands spent $1 billion developing its casino on Macao Peninsula, then recouped the entire capital cost in seven months. Turnover already exceeds that of Las Vegas, and most of the gamblers are Chinese. According to one Irish property developer, they only go there to gamble and spend all their waking hours at it. The average stay in Las Vegas is 3.4 days, but in Macao it's only 1.2. If you could get them to stay longer, who knows what the revenue would be?
Different casinos are aimed at different markets. The traditional model in Macao is VIP, perfected by Stanley Ho, who owns a fleet of private aircraft. Suboperators called junkets collect gamblers from Korea, Japan and Malaysia, who get their own rooms and tables, and the junkets split the revenue 50/50 with the casino operators.
Wynn exemplifies the second business model, marrying a casino with luxury shopping and swimming pools. Its interior is more plush than glitzy, with padded leather armchairs around the gaming tables and a relatively small area (compared with Las Vegas) for poker machines. Shops include Armani, Chanel, Fendi, Hermès, Tiffany and Bulgari.
The third business model is more mass-market, offering lavish entertainment to attract much larger crowds, as well as conferences and exhibitions. This year, for example, the spectacular Cirque du Soleil will take up a permanent residency at the vast Venetian casino complex on Macao's second island, Taipa, the new boom area.
The Venetian, another Sands operation, would leave you speechless. With 3,000 hotel rooms, high-end shopping malls and a main gaming floor that must be the size of four or five soccer pitches, the complex is right up there with the Pentagon, in Washington, DC, and Ceausescu's palace, in Bucharest, in the list of the world's largest buildings.
It comes complete with pastiches of the Rialto Bridge, St Mark's Campanile and the facade of the Doge's Palace in Venice, frescoes, fake Tintorettos, Murano glass chandeliers, internal shopping streets with painted blue skies, and even canals and gondolas, whose Italian gondoliers, in black-and-white striped T-shirts, sing O Sole Mio.
The scale is so vast that the porte cochere is wide enough to accommodate six lanes of taxis and limousines dropping off guests. Inside, the main gaming hall is packed with gamblers, especially around lucky tables or in the VIP area, where large minimum bets apply. The Venetian is a Disneyland for adults with everything to lose.
It is located on what has become known as the Cotai Strip, a boulevard of dreams in the making. Six major hotels are under construction on this reclaimed land - Sheraton, Four Seasons, Ritz-Carlton, Shangri-La, St Regis and Crowne Plaza - and a shopping centre is also planned, as there is only one so far in the whole of Macao's 26sq km.
China's red flag flies over the former governor's mansion, with a little Macao flag alongside, and the money is rolling in. Under licences that run for 20 years, the government takes 43 per cent of the gross revenue of the casinos as well as taxing their profits - not bad for an administrative region with a population of only 500,000.
Tourist numbers exceeded 24 million last year, with more than half coming from mainland China, just across a narrow strait, and a high proportion from Hong Kong, which is 45 minutes away by catamaran or hydrofoil ferry. These are run by Shun Tak, controlled by Ho (of course); he also owns a stake in the local airline, Air Macau.
One of the few white elephants Ho invested in was a family-friendly theme park called Macau Fisherman's Wharf, which offers nightly eruptions from its 40m-high volcano, gladiatorial combats in a Roman amphitheatre and a range of restaurants and shops installed in a variety of buildings culled from Amsterdam, Lisbon and Cape Town.
The nearby black-and-gold Sands casino (slogan: "It all happens here") occupies the equivalent of two or three city blocks and is doing much more business. Not far away, a huge gilded statue of the haughty MGM lion stands guard at the curvaceous 28-storey MGM Grand.
Singapore is planning to offer some competition to Macao, with an integrated tourism resort planned for Sentosa Island. With characteristic restraint, Singapore doesn't trumpet the development as casino-based, even though that's what it is; one of the two licences went to Sands, the other to Malaysia-based Genting.
Thirty per cent of Macao's population is Catholic, a legacy of four centuries of Portuguese rule, but its cathedral is a ruin. Destroyed by fire in 1835, it was never rebuilt; all that survives is its ornate baroque facade, studded with symbols of Asian and European spirituality. In Macao the gods of religion have long since given way to Mammon.