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Best of Howard Stutz

Gaming Guru

Howard Stutz
 

Casinos watch power shift in Macau

3 August 2009

LAS VEGAS, Nevada –- Fernando Chui holds the future of Macau's once burgeoning casino industry.

But will the 52-year-old former Macau legislator and cultural minister let the gambling enclave return to its boomtown days?

That's the question on American casino operators' minds.

Chui was overwhelmingly appointed Macau's new chief executive last week by the Special Administrative Region's 300-member election committee.

He takes over Dec. 20 from Edmund Ho, the only chief executive Macau has known since its return to China in December 1999 after 442 years of Portuguese rule.

Being chief executive is like being governor. But the position also provides a buffer between Macau and Beijing.

Ho presided as Macau ended a four-decade gambling monopoly controlled by Hong Kong billionaire Stanley Ho (no relation) and opened the doors for American investment.

Wynn Resorts Ltd., Las Vegas Sands Corp. and MGM Mirage spent billions over the past decade to build Las Vegas-style hotel-casinos. The investment paid off. Macau surpassed the Strip in gaming revenues in 2006.

However, the worldwide economic crisis caused a slump in the Macau gaming industry. Revenue and tourism numbers fell and casino jobs were lost.

Beijing didn't help matters. Visa restrictions were implemented in early 2008, limiting the number of trips Chinese citizens can make into Macau, which has reduced the enclave's primary customer source.

Chui was born in Macau and educated in the United States. His undergraduate degree is from Sacramento State and he has a doctorate from Oklahoma State University.

He has a close relationship with Beijing. That may soften the visa issue.

"The motherland not only provides us with powerful backing, but also continuously injects dynamism into our development," Chui said.

Union Gaming Group principal Bill Lerner said China had been quietly easing the visa restrictions. Eventually, he thought, frequent travel would return.

"We do believe Beijing, as a sign of support for the new administration, will ultimately issue a supportive statement about the importance of Macau's key industry," Lerner said.

One aspect that isn't expected to change under Chui is the current cap on the number of gaming licenses allowed by the government. There are three concessions and three subconcessions.

This is bad news for Harrah's Entertainment, which missed out on the licensing process in the first go-around. Harrah's acquired a Macau golf course in 2007 with hopes of redeveloping the land into a casino site, but that appears unlikely in the current scheme.