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Casino Companies Bet on China

14 February 2005

CHINA – As reported by the International Herald Tribune: "…The China Center for Lottery Studies at Beijing University estimates that about 600 billion yuan, or $72.5 billion, in gambling money flows out of the country every year. The Chinese government, looking to retain as much of that money as it can, deregulated its gambling industry in 2001.

"The move opened the gates to foreign operators, including Sands, that have pined for the opportunity to set up shop in Macau, a gambling enclave that for 40 years was controlled by a single casino operator, Stanley Ho.

"…In 2004, Macau, China's only legal gambling hub, represented the second-largest gambling market in the world, generating about $5 billion in revenue with the daily win per table averaging more than $15,000, according to a report by J.P. Morgan. Those figures, the report said, 'put it on par with Las Vegas and ahead of Atlantic City,' heretofore the world's two largest gambling markets. Las Vegas casinos generated gambling revenues of $5.3 billion in 2004, with an average win per table per day of $2,500 to $2,700.

"…By the end of the decade, Macau could well surpass Las Vegas as the world's largest gambling market. J.P. Morgan projected that Macau would generate more than $10 billion in annual gambling revenue within the next four years, 'roughly the equivalent' to Atlantic City and the Las Vegas Strip combined. The projection is based on expectations that Beijing will continue to relax travel restrictions from mainland China as well as allow for Las Vegas-style megaresort developments that will increase the number of rooms far beyond its current level of about 6,000.

"…And this month, the Sands Venetian in Las Vegas will open two private gambling salons targeted at Asian high rollers - gamblers willing to spend upward of $500,000. The salons, the company said, will be promoted actively to customers visiting the Sands Macau.

"…The intent is to turn Macau and its nearby sister islands of Lantau, Taipa and Coloane into a regional casino-resort hub oriented toward business as well as leisure travelers. Macau had 16 million visitors last year, most of whom came from mainland China. Both Sands and Wynn Resorts are planning to build large-scale casino-hotels in the market within the next two years…"

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