Macau: It's not your mother's Vegas
Fireworks explode outside the "City of Dreams" casino in Macau, China.
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Bill Radke: This week Casino operator Wynn Resorts raised more than $1.6 billion on the Hong Kong stock exchange to build a second casino in the world's gambling capital, Macau. Wynn and its fellow American gamer Las Vegas Sands depend on this former Portuguese colony for more than half their revenue. How bright's the future there? Our China bureau chief Scott Tong took a turn at the tables.
Scott Tong: Macau casinos made a record $1.4 billion in August -- triple the take of Las Vegas. Just a year ago, American casinos here laid off thousands of workers and mothballed expansion plans. What changed?
Local economist Ricardo Siu says Chinese high-rollers who'd laid off the tables returned.
Ricardo Siu: This is a matter of confidence. Once now the market rebounds, they have the purchasing power. And they will just continue their leisure consumption.
And Siu says the special visa rules regulating mainland Chinese visitors to Macau were relaxed. The gamblers can come more often now. The question is whether they hit the local Macau casinos or the flashier American ones.
The Vegas outfits first came in 2004, glitzing up this seedy gangster town. Local political scientist Eric Sautede saw the Black Eyed Peas at one of them, the fancy new casino, the Venetian.
Eric Sautede: You had Donna Summer as a guest. I know she's not young any more, so that I guess she needs that as a retirement scheme, maybe. But still, this is something that never came to Macau before.
Revenues came more slowly. The Americans still lag behind the local operators. Consultant Steve Vickers at FTI International Risk says the new guys in town are learning the hard way.
Steve Vickers: Most of the mainlanders who come to gamble are not interested in the Disney experience or the family experience. They are there to gamble. And then maybe have a bubble bath on the way out.
The singing gondola operators, the restaurants, the circus shows may one day attract more Chinese. Tourism professor Cathy Hsu teaches at Hong Kong Polytechnic University:
Cathy Hsu: As they travel overseas and they develop an appreciation for those things, then maybe 10 years from today, the Venetian market could be right on target. But the question is, can the investors wait that long?
There are incentives. The Macau pie is gigantic. And politically, this territory may be too important to fail.
In Macau, I'm Scott Tong for Marketplace.