Macao casino competition heating up with arrival of newcomers

HONG KONG, Aug. 28 Kyodo

Competition in the gambling industry in Macao, the former Portuguese colony dubbed as Asia’s Las Vegas, is getting fierce and those who cannot compete should stand down, casino mogul Sheldon Adelson said Monday.

Adelson, chairman and chief executive officer of Las Vegas Sands Corp. in the United States, appeared in Macao for the topping-off ceremony for his Venetian Macao Resort Hotel on Cotai, a strip built on reclaimed land between the Macao islands of Taipa and Coloane, adjacent to the city of Zhuhai in China’s Guangdong Province.

”If you can’t stand the heat, leave the kitchen,” Adelson said in response to concerns expressed by Macao’s own casino magnate Stanley Ho about competition-led profit decline and job losses.

Adelson warned Ho that competition will be fiercer in the future as new players like himself and Las Vegas casino resort developer Steve Wynn enter the circle that Ho had monopolized for 40 years.

Macao opened the casino market in 2002, forcing Ho to accept new players by issuing two new licenses. The government later allowed splitting the three licenses into a total of six.

Three licenses are secured by Ho, his daughter Pansy Ho in alliance with MGM Mirage, and his son Lawrence Ho’s Melco International Development Ltd. in alliance with Australia’s Publishing and Broadcasting Ltd.

The other three licenses were snatched by Wynn, Adelson and Hong Kong businessman Lui Che-woo’s Galaxy Entertainment Group.

While Wynn’s first Macao casino is due to open next week, Adelson’s second casino is scheduled to operate around mid-2007. Sands Macao has been operating since May 2004.

Ho had earlier complained about losing businesses to Sands as it pays higher commission to agents who are responsible for bringing high rollers to VIP gaming halls.

It was reported that Ho’s 150 VIP halls pay a 0.7 percent commission to agents while Sands pays 1.1-1.4 percent, drawing away punters and causing profit and job losses in a third of Ho’s VIP halls.

But Sands President and Chief Operating Officer William Weidner said they are paying the same percentage of commission in market. He said the payout is around 1.1 percent but unlike Ho, they do not have as many middlemen who cut into the agents’ share.

”We have fewer layers,” Weidner said. ”Fierce competition happens all over the world. If he (Ho) can’t stand competition, then don’t compete.”

Ho has warned about instability in Macao should the high commission rate stay on, but Weidner said he is not worried about cutthroat competition. Regarding Ho’s earlier plea for an industry chamber to regulate agents commission, Weidner said Sands ”will never join an organization whose purpose of it is to sit down and talk about setting prices.”

The blooming gambling industry has led to a labor shortage, with local businesses like street-side delis unable to offer salaries as high as those available at casinos.

”No one can escape the law of supply and demand. There are pains in the middle, but anyone is going to have to pay to adjust because if you stand still, then other economies run over you. It’s difficult but it’s got to be done,” Weidner said, adding that the government is expected to eventually allow more workers to come in and fill the vacancies.

The Sands Macao casino, which is the world’s biggest casino by number of tables, features 740 tables and 1,254 slot machines. The Venetian Macao Resort Hotel will add 700 tables and 6,000 slot machines. The Wynn Macao casino, due to open Sept. 7, will have about 200 tables and 380 slots machines.

COPYRIGHT 2006 Kyodo News International, Inc.

COPYRIGHT 2006 Gale Group

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