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Rod Smith

Sands Macau to Lead Development in China

6 May 2004

MACAU -- Gaming magnate Sheldon Adelson's 1-million-square-foot Sands Macau casino and entertainment complex, which is leading a wave of new casino developments off the coast of China, is expected to open May 18.

The $240 million Sands Macau will be owned by Adelson's holding company, Las Vegas Sands, and will have 319 table games, 600 slot machines, 18 restaurants, bars and entertainment venues located near the ferry terminal in Macau.

Las Vegas Sands President Bill Weidner said the Sands Macau will give a face lift to Macau, which he compared to downtown Las Vegas or Reno.

He said the growth of China, whose economy has been growing at more than 14 percent a year over the past decade, is driving the development of Macau as a visitor destination.

"China is the fastest-growing major economy in the world, and the fourth-largest export economy in the world," he said.

It boasts the fastest-growing and second-largest middle class, which is rapidly becoming the largest middle class of any country in the world, Weidner said.

He said with about 1.4 billion people within a couple hundred miles of Macau, the island is also destined to become one of the biggest and fastest-growing visitor destinations anywhere.

Las Vegas Sands plans to use the market to compete with other Asian destinations and to lure more visitors to its properties in Las Vegas, Weidner said.

The opening of the Sands Macau casino will break up a monopoly on casino operations in Macau that Stanley Ho, 82, and his gambling cronies have enjoyed for almost 50 years.

Two years ago, authorities approved breaking the monopoly on casino operations by awarding gambling concessions to three groups -- Adelson, Las Vegas-based Wynn Resorts and Ho's group of companies.

The Sands Macau is next to the $60 million Galaxy Waldo Hotel-Casino, a smaller property with 38 tables and 100 slot machines being developed by Galaxy, a company started by Hong Kong property tycoon Lui Che-woo, who shares a casino license with Adelson. It is run by Francis Lui and is set to open in June.

A $122 million waterfront entertainment and retail complex called Fisherman's Wharf is being built on the other side of Adelson's casino by Ho and David Chow, his partner, and is set to open before year's end.

Las Vegas developer Steve Wynn is also planning to build a $500 million hotel-casino, which is expected to open in 2006, although he is hoping for reforms to the enclave's gambling laws before he commits further.

In addition to opening the Sands Macau next to the ferry terminal, Las Vegas Sands is obligated to open the Macau Venetian Casino Resort, a second and permanent casino, by June 2006, and invest $550 million in its Macau developments by June 2009.

Adelson's long-term plans to develop the $10 billion, so-called Cotai Strip, a strip of reclaimed land between the Macau islands of Taipa and Coloane, includes a 1,500-room resort and casino. He is inviting others to join in building the 20 casinos and 60,000 hotel rooms that will constitute the new Las Vegas Strip East.

The Galaxy operation, a group of Hong Kong investors that has teamed up with Adelson, also plans to build a 3,000-room resort casino on separate land in 2006.

In all, these projects will require 22,000 additional workers and increase the number of jobs in Macau by about 10 percent.

All the development is transforming Macau. The latest boom helped push Macau's economy ahead by a 15.6 percent last year, with growth hitting a 21.1 percent in the fourth quarter.

Wynn, who declined to discuss his development, remains the wild card amid this sudden bustle of development.

He threatened in August to pull out of a planned venture if Macau failed to enact gambling reforms by the end of last year. It didn't happen, but Wynn didn't make good on his threat to bail out.

He is hoping for legislative changes in Macau that would let gaming companies extend credit to gamblers, as well as tax reforms.

Macau lawmakers are working on allowing casinos to lend money to gamblers, but one of them, Ng Kuok-cheong, said the bill stops short on tax concessions.