The Sands effect

A new chapter in Macau's gaming industry and urban growth story began a decade ago when the first Las Vegas-style casino opened.

Sands Macao was Stanley Ho Hung Sun's first casino outside of its 40-year monopoly and the starting point for Las Vegas Sands Corp's entry into Asia.

As the Macau government focused on diversifying its economy for services such as tourism, 18 May 2004 marked a turning point for an industry that has not stopped growing not only in Macau but also in Asia. 슬롯머신

When the $265 million casino opened, thousands of people jumped into the game floor to make the first bet. From that day on, Macau's game industry will never be the same again.

"Sands Maca was a 'game changer' that awakens the gaming industry in Macau," says Grant Govertsen, a Macau-based analyst at Union Gaming Research Macau Ltd. "It was the first to show the amazing potential of the Macau game market in terms of total game revenue and investment," he said.

Las Vegas Sands, managed by Sheldon Adelson, recouped its investment in less than a year and helped transform Macau into the world's largest casino destination.

"When Sands Macau opened in 2004, it definitely represented a new era of the redevelopment of Macau's game industry as a world-renowned casino game destination, especially the development of the popular market," said Ricardo Cucichen, a game expert at the University of Macau.

In the year Sands Macau opened, Macau's game revenue was $5.5 billion. Last year, Macau casinos generated $45.1 billion in revenue, seven times the revenue of Las Vegas Stripes during the same period.

"The entry of established international integrated resort operators has become a major catalyst for Macau to evolve into Asia's first choice as an entertainment destination," said Govsen.

"The trademark effect continued to stimulate new demand for casino games in Macau," says Ricardo Siu, after the announcement of an international company that obtained casino licenses in Macau under the liberalization process in 2002.

The competition in Macau's game industry has also intensified. There was even a very open fight between Mr Adelson and former proprietor Ho. But eventually, the cake got bigger and bigger and they could all have their share. It's a more profitable company than ever before.

However, some people think that there is too much focus on the game. Carlos Siu Lam, a gaming associate professor at the Macau Polytechnic Institute, said, "I think it rarely appears in the non-gaming sector because we've focused so much on the gaming sector. And this doesn't seem to fully reflect what was expected from game liberalization," he said.

The existing game attributes of 2004 are very different from the current standard. Sands Macao introduced a new concept into the market, but it also experienced trial and error in the company.

Shortly after opening with several hotel rooms and the longest buffet line in Macau, management understood that the strategy had to be revised. Customers who slept around the hotel and took advantage of significant discounts at buffets were not the kind of customers the company was after.

Nevertheless, it has set new standards for the industry. "Each new resort has set standards much higher, which has forced all operators to innovate and generally improve their operational skills," said Goversen of Union Gaming.

"Kotai will raise that standard even more," he added, "there will always be a casino market on the Macau Peninsula.

Sands China Ltd, a Macau subsidiary of Las Vegas Sands, opened its $2.6 billion Venice Macau in 2007, one of the city's most successful casino resorts. But the company's growth in Macau has not been without ups and downs.

Sands China had to go through a learning process to adapt to the new business culture. And it struggled to obtain government permission to sell apartments in Four Seasons Apartments Hotel Tower, and there was an agreement that Sands deserved such a plan, but officials suffered considerable difficulties when they refused the company's additional land application for Kotai on a site known as sections 7 and 8.

Sands China has also been embroiled in a legal battle between former President Steven Jacobs and the chief executive, who claims he was unfairly dismissed. Overall, the company has become famous for its high turnover among top executives. The last person to resign was Chief Operating Officer David Sisk, who left the company last September.

Sands China was instrumental in bringing the best entertainment and sports stars to Macau, which helped expand Macau's appeal as a tourist destination, as envisioned by Beijing. But ironically, in 2012, three and a half years after a 10-year contract, the production of Cirque du Soleil in Macau, Venice, was forced to stop. This is due to the low number of audience for expensive resident shows.

The cultural shock may have been greater than expected. Because of the "difference between foreign companies and the corporate culture and legal practices of Macau."

We are confident that it will not be easy for any foreign company to enter the new international market. Sands has clearly figured out how to operate successfully here in [Macau] (not just competitors)," said Govertsen.

Venice Macau is the first accommodation to open in Kotai, and is now the center of Macau's games, attracting millions of tourists every year.

In 2004, 16.7 million tourists visited Macau, which increased to more than 29 million last year.

However, Macau is still expected to gain more in terms of its growth potential. "The industry as a whole may still be at a turning point from traditional/regional to modern/global-level structures," says Ricardo Siu.

It will still take a lot of effort. "There seems to be a lot of work to be done to attract visitors from various jurisdictions (beyond Greater China) to make Macau a true regional (or international) game and resort," Carlos Sioux said.

One thing is for sure: Macau has undergone major changes over the past decade. Few can predict the growth it has heralded since 2004. "We are confident that there will be more than a decade left in relation to the growing demand from mainlanders for Macau," says Mr Govertsen.