China Hand

Forbes Asia cover

GAMBLING’S BIGGEST PRIZE

Steve Wynn reinvented Las Vegas. He mints money in Macau. An even bigger Asian jackpot looms for his remade company-but first there is the Sheldon Adelson factor.

By: Donald Frazier
originally seen in FORBES Asia

 

image004It’s a big day for billionaire casino mogul Steve Wynn. Just off a flight from the U.S., he greets me at his posh Wynn Macau resort in rumpled jeans instead of his usual custom suits. He’s charged up that four Qing dynasty vases he won at auction for $12.7 million have safely arrived. The vases are to be installed in the lobby, and carpenters, electricians and security experts bustle about, building a sumptuous altar for them. “These vases have been out of the country since the 18th century,” he says, “Now they’re back where they belong.”

Wynn is famous for his art collector’s sensibility, but the vases also earn him chits in his quest for Beijing’s favor—and all that may bring. For now he runs the classiest joint in Macau, opulent to the max and drawing the city’s largest share of lucrative high rollers, most from the mainland. Any day now he could win a license for a second casino, out on the Cotai Strip, away from downtown.

All the while he maintains a tight grip on his company, Las Vegas-based Wynn Resorts, ousting a partner who had become a thorn in his side, Japanese billionaire Kazuo Okada, and forcibly buying back his stake in February (see box, opposite).

But at age 70 Wynn has built an Asian team that can see this effort through to what one day could be the ultimate casino jackpot. He’s anointed the Taiwanese-American executive who runs the Macau operation, Linda Chen, as his likely heir apparent.

As Wynn expands his Asian footprint, he must grapple with how much the Chinese government will indulge its people’s zeal for gambling. He must also deal with canny regional rivals in the betting business—and with the even grander designs of his Las Vegas counterpart, uber billionaire Sheldon Adelson.

What they are all stalking is not just the motherlode of Macau, rich as that has become at $33.5 billion in wagers…

Three Key’s To Wynn’s Success

image005He never claims he did it all by himself. At key points in his career Steve Wynn has always found the right person to help him take the next step. Here are three:

Linda Chen, 44, had always followed the top student’s safe, hardworking path to conventional success. She came to the U.S. from Taiwan when she was 10 and after growing up in New Jersey went to Cornell University, an Ivy League school. Everyone expected her to become an investment banker or perhaps signon with a global hotel corporation. Instead, she’s working at a casino.

Now she’s the number two person in Wynn Resorts and often mentioned as Wynn’s heir apparent Running up the chain of command with only a few years break to work for a competitor, she’s one of the best paid working women in the world, with annual compensation last year of $6.2 million. “Not many people thought about casinos,” she says of the day she attended a college job fair in 1989. Especially not her parents: “They certainly took sometime getting used to the idea!” Knowing little about the business, she was attracted by Wynn’s desire to bring ambitious grads from prestigious…

“Not many people thought about casinos”: Linda Chen, COO of Wynn Macau.

Last year, by far the world’s largest such destination. It is also the mainland itself, kept clean of casino gambling since the revolution.

About China, where it’s not even legal to collect gambling debts, most are reluctant to talk—wynn won’t at all. But with a seemingly insatiable craving for games of chance in China, the sense is that the show must come home to the bettors, somehow and somewhere, over the next decade or so “Legalized casino gaming in China is inevitable” says a longtime Macau consultant. “There is already some sports betting, lotteries and video lottery terminals, and talk of gaming being offered in [the southern Chinese island of Hainan in the near future. When push comes to shove, the Chinese Communist Party has generally been guided by pragmatism more than ideology, to ensure its survival.”

image007Beijing is in no rush. It has many factors to weigh, from the lure of taxes and jobs and its aversion to glamour and glitz, to Macau’s ability to handle any more growth.

when Beijing does decide, Wynn will be ready. Doing everything to jockey into position as a friend of the Chinese people, he’s learning Mandarin and spending millions on that Chinese classical art. Four years before he bought the Qing vases, he paid $10 million for a 650-year-old red vase from the Hongwu period, which he promptly donated to the Macau government’s cultural affairs bureau. He had his company give $135 million to the University of Macau last year. Wynn does not actually live in Macau, but he makes six to eight trips a year there, staying for up to a week each time. One glance around his office in the Wynn Macau suggests he feels perfectly at home. In fact, it’s hard to call Wynn Resorts an American business anymore, with 72% of its 2011 sales of $5.3 billion coming from Macau. And the company made all of its net profit last year in Macau– $613 million-making up for the moneyitlostonits economy-addled Las Vegas casinos.

For all his efforts, however, Wynnis the underdog in this historic contest. Adelson,78, and his Las Vegas Sands are also wise to Chinese sensibilities. Describing design themes for his Sands Cotai Central casino project opening Apr. 11, Adelson is careful to avoid the word “Tibetan,” choosing “Himalayan”instead. His company is even more heavily focused on Asia thanis Wynns, with Las Vegas Sands collecting 82% of its $9.4 billion in revenue last year in Asia. His resources are greater, with FORBES ASIA putting his networth attentimes Wynn’s $2.5billion fortune. (Wynn’s 2010 divorce was costly—his ex-wife, Elaine Wynn, is now worth $1.4billion.)

More important, the older man has stayed a few steps ahead of Wynn. After Stanley Ho’s 40-year monopoly on Macau casinos ended in 2002, Adelson struck first. While the meticulous Wynn planned, Adelson quickly and cheaply built Sands Macao, opening a small casino hotel—it had just 50 rooms—in 2004. For two years before the Wynn Macau opened, Adelson was collecting his winnings. In 2007 he launched the Venetian Macao on the…

Page 2

schools to Las Vegas.

image007bMoving to Macau in 2003 to help start the new Wynn resort, Chen became Wynn’s personal representative to the government and the Chinese high rollers who are such a significant part of the clientele. He relies on her to such an extent that he says, “She has been a member of my family in the most personal sense, virtually one of my own daughters.” He notes that she sits next to him at board of directors’ meetings.

But before Chen arrived in Asia, Wynn needed a guide and mentor when he was seeking backers for his Macau bidin Hong Kong, where he knew few people That became Allan Zeman, 63, a Montreal-raised lawyer who became one of Hong Kong’s more flamboyant figures after arriving 37 years ago. Famous for developing the Lan Kwai Fong nightlife area in Central and more recently for reviving Ocean Park amusement park, he knows everybody. “Steve wanted to understand how he can do the same thing here that he did in Vegas; all it took really was seeing that customers here want his creativity, just in a different vernacular” says Zeman. He’s now a Wynn Resorts director a frequent presence in Wynn’s Macau office and a friend.

Not so Kazuo Okada, 69. Japan’s pachinko king played angel in 2000, buying a 50% stake in Wynn Resorts for $260 million when Wynn most needed investors after losing control of his previous company. But later Okada needed money and wanted to become a casino developer himself. Relations soured, becoming public in February in a flurry of charges, countercharges and lawsuits. Wynn had hired a former head of the FBI to delve into Okada’s drive to develop a casino in the Philippines (see p. 39) and alleged that he had covered the expenses for Manila regulators staying at the Wynn Macau. Wynn, concerned that this could endanger his casino license in Nevada, forced Okada out of his seat on the board and took back his shares at a 30% discount. Afterward the Philippine government banned Wynn from operating anywhere in the country, although he had never expressed interest in doing that Okada is now worth $1.8 billion down from $2.1 billion a year ago. -D.F.

FORBES ASIA

SΤΕVΕ WΥΝΝ

image007cCotai Strip, with a gambling hall nearly five times as large as the one in his first Venetian, on the Vegas Strip. Another Cotai entry, the Plaza Casino, opened in 2008, and the $4.6 billion Sands Cotai Central will be his fourth property. Meanwhile, nobody expects Wynn’s second property to begin making money before 2016.

Adelson has been a big hit in Singapore, whose market economy and tightly controlled society is admiringly viewed by Beijing. The iconic Marina Bay Sands opened in 2010, and already Merrill Lynch forecasts that it and the city’s other new casino will generate more cash this year than all of Las Vegas’ venues-S6.5 billion last year. (Macau passed Las Vegas in 2006.) Wynn does top Adelson when it comes to wooing rich Chinese who love high-stakes gambling, deriving a larger share of his business—80%– from Macau’s VIP gamblers than anyone else. For Macau overall, the VIP share was 73%. The result: Wynn’s casino churns out profits at a rate of $6,940 a table each day, compared with $3,860 at the Adelson properties, according to Jake Fuller of Lazard Capital Markets in New York.

Unlike Wynn, Adelson doesn’t have an obvious successor. And he has had his embarrassments. In December 2010 the Macau authorities launched a prostitution raid on his flagship while he was there for a board meeting. In gangbusters style, 70 police officers charged in and arrested 132 women and their pimps. No one working for the Venetian was charged.

Wynn describes their relationship as amicable, and Adelson says the same. Over the years, and as recently as four months ago, they’ve been out to dinner together with their wives (Wynn remarried last year). Today neither will talk about their competition. “The growth here is stupendous, and there’s more than enough business to go around,” says Wynn.

If there’s one test the two must pass to enter the mainland, it’s proving they can draw visitors to Macau who do more than justbet. China covets a Las Vegas-style economy for Macau, with resorts, entertainment, shopping and restaurants, driven by a robust business in conventions, corporate meetings and family vacations. Wynn early…

THE KINGMAKER

With a networth of roughly $25 billion, Sheldon Adelson could personally fund an American presidential campaign– say, $1billion or so—and hardly notice. So the $16.5 million he used to jolt Newt Gingrich’s flatlining presidential bid-back to life for a bit, was a pinprick.

ls that power to influence fair? “I’m against very wealthy people influencing elections,” he shrugs. “Butas long as it’s doable, I’m going to do it. Because know that guys like [George] Soros have been doing it for years, if not decades. And they stay below the radar by creating a network of corporations to funnel their money. I have my own philosophy, and I’m not ashamed of it. gave the money because there is no other legal way to do it. I don’t want to go through ten different corporations to hide my name. I’m proud of what I do, and I’m not looking to escape recognition.”

He’s also proud of his hawkish defense of Israel–his wife is Israeli and his young sons carry Israeli passports. Yet those who have categorized his…

– 36 Forbes Asia april 2012–

 

on proved himself a master at this type of enterprise after opening the Mirage and the Bellagio on the Strip, changing the nature of Las Vegas in the 1990s. A diversified, more wholesome Macau would also pose less risk to the official value system, easing the politics of introducing casinos to the mainland.

Macau is far from realizing this model. Tens of thousands of gamblers from the mainland arrive by bus, ferry and plane everyday, and few spend much time away from the tables. Many don’t eat in the restaurants, go to the shows or shop. And they get there by signing up with “junkets” middlemen who organize the trips, lend the gamblers money and sometimes have criminal ties. But efforts to diversify by the locally owned casinos haven’t gotten far.

In Asia it is hard to trump Adelson’s moves on this front. From the Venetian Macao’s signature restaurants, 330-store shopping mall and gondola rides to its 15,000-seat arena for acts such as Cirque du Soleil and Taiwanese pop singer Jam Hsiao, it’s no coincidence the hotel’s 3,000 rooms enjoyed an occupancy rate of 91%last year. And Adelson is bringing in other Asians. For example, there’s a sixfold increase in visitors from India, many for large, costly weddings, says Charlie Greco, a former Sands senior manager and now chief executive of Universal Event Management in Macau. He’s opened an office in New Delhi to sell them travel packages. “These are not gamblers,” he says.

Adelson has even more a foot as he positions Sands Cotai Central to be a veritable resort city on its own.

Wynn doesn’t disparage any of this. He put up a second tower on the Wynn Macau in 2010, expanding the capacity to 1,014 rooms, but the complex collects less than 10% of its revenue from non gaming sources. (The Venetian Macao got 23% from non gaming sources in the last quarter of 2011, the highest of any hotel in the city.) His big entry in the integrated resort sweepstakes will be the 51-acre Wynn Cotai.

His people, though, won’t go into specifics, not as long as the local authorities might regard it as a “preannouncement” that could jeopardize the project’s final approval (he won preliminary approval last September). But Wynn is so enthusiastic about his plans for an outdoor entertainment spectacle there that, forgetting there’s a reporter in the room, he talks all about it in a brainstorming session with his Las Vegas creative team in his office. Then he catches himself, turns aside and says, “This is all off the record, right?”

What could be holding things up? Some 28 million visitors came to Macau last year-up from 74 million in 1999, the last year of Portuguese rule—and China maybe realizing that the 11-square-mile Special Administrative Region can no longer handle the breakneck growth. Macau International Airport, opened only in 1995 but well before the casino boom, doesn’t have enough space for airplanes between flights. A lack of parking severely limits private auto traffic from China. Ferries from Hong Kong take just an hour, but they have little room for luggage, and congested docks can mean long waits at each end. Plans for a rail link from China and abridge to Hong Kong haven’t gotten past the drawing board. The bottlenecks work against China’s goal of broadening Macau’s economy. Corporate meeting planners are especially wary. “Sheldon is…

…patronage of Gingrich and other Republicans as a one-issue investment have it wrong. The man whose net worth, by FORBES calculations, has jumped more ($21.6 billion) during the Obama Administration than any other American’s Facebook’s Mark Zuckerberg included wants to take the President out for economic reasons. *what scares me is the continuation of the socialist-style economy we’ve been experiencing for almost four years. That scares me because the redistribution of wealth is the path to more socialism and to more of the government controlling people’s lives what scares me is the lack of accountability that people would prefer to experience-just let the government take care of everything and I’ll go fish or I won’t work, etc.

“U.S. domestic politics is very important to me because I see that the things that made this country great are now being relegated into duplicating that which is making other countries less great… I’m afraid of the trend where more and more people have the tendency to want to be given instead of wanting to give People are less willing to share. There are fewer philanthropists being grown, and there are greater expectations of the government. believe that people will come to their senses and not extend the current Administration’s quest to socialize this country. It won’t be a socialist democracy because it won’t be a democracy.”

So with Gingrich looking unviable, does that mean he’ll throw his largesse behind another candidate? “if [rival Republican candidate], Ron Paul is chosen certainly wouldn’t do that “what about front-runner Mitt Romney? “I don’t want to say, Newspapers said I had two meetings with Romney and Gingrich [on Feb. 31], which is untrue. Most of what is being said about me in this current brouhaha is just not true. I know Romney, I like him. know [Rick] Santorum; I like him. … The likelihood is that I’m going to be supportive of whoever the candidates. I just haven’t decided that yet and will wait to see what happens.”—Steven Berton

 

-Rul-2012 FORBESASLA | 37

 

image008on proved himself a master at this type of enterprise after opening the Mirage and the Bellagio on the Strip, changing the nature of Las Vegas in the 1990s. A diversified, more wholesome Macau would also pose less risk to the official value system, easing the politics of introducing casinos to the mainland.

Macau is far from realizing this model. Tens of thousands of gamblers from the mainland arrive by bus, ferry and plane everyday, and few spend much time away from the tables. Many don’t eat in the restaurants, go to the shows or shop. And they get there by signing up with “junkets” middlemen who organize the trips, lend the gamblers money and sometimes have criminal ties. But efforts to diversify by the locally owned casinos haven’t gotten far.

In Asia it is hard to trump Adelson’s moves on this front. From the Venetian Macao’s signature restaurants, 330-store shopping mall and gondola rides to its 15,000-seat arena for acts such as Cirque du Soleil and Taiwanese pop singer Jam Hsiao, it’s no coincidence the hotel’s 3,000 rooms enjoyed an occupancy rate of 91%last year. And Adelson is bringing in other Asians. For example, there’s a sixfold increase in visitors from India, many for large, costly weddings, says Charlie Greco, a former Sands senior manager and now chief executive of Universal Event Management in Macau. He’s opened an office in New Delhi to sell them travel packages. “These are not gamblers,” he says.

Adelson has even more a foot as he positions Sands Cotai Central to be a veritable resort city on its own.

Wynn doesn’t disparage any of this. He put up a second tower on the Wynn Macau in 2010, expanding the capacity to 1,014 rooms, but the complex collects less than 10% of its revenue from non gaming sources. (The Venetian Macao got 23% from non gaming sources in the last quarter of 2011, the highest of any hotel in the city.) His big entry in the integrated resort sweepstakes will be the 51-acre Wynn Cotai.

His people, though, won’t go into specifics, not as long as the local authorities might regard it as a “preannouncement” that could jeopardize the project’s final approval (he won preliminary approval last September). But Wynn is so enthusiastic about his plans for an outdoor entertainment spectacle there that, forgetting there’s a reporter in the room, he talks all about it in a brainstorming session with his Las Vegas creative team in his office. Then he catches himself, turns aside and says, “This is all off the record, right?”

What could be holding things up? Some 28 million visitors came to Macau last year-up from 74 million in 1999, the last year of Portuguese rule—and China maybe realizing that the 11-square-mile Special Administrative Region can no longer handle the breakneck growth. Macau International Airport, opened only in 1995 but well before the casino boom, doesn’t have enough space for airplanes between flights. A lack of parking severely limits private auto traffic from China. Ferries from Hong Kong take just an hour, but they have little room for luggage, and congested docks can mean long waits at each end. Plans for a rail link from China and abridge to Hong Kong haven’t gotten past the drawing board. The bottlenecks work against China’s goal of broadening Macau’s economy. Corporate meeting planners are especially wary. “Sheldon is…

…patronage of Gingrich and other Republicans as a one-issue investment have it wrong. The man whose net worth, by FORBES calculations, has jumped more ($21.6 billion) during the Obama Administration than any other American’s Facebook’s Mark Zuckerberg included wants to take the President out for economic reasons. *what scares me is the continuation of the socialist-style economy we’ve been experiencing for almost four years. That scares me because the redistribution of wealth is the path to more socialism and to more of the government controlling people’s lives what scares me is the lack of accountability that people would prefer to experience-just let the government take care of everything and I’ll go fish or I won’t work, etc.

“U.S. domestic politics is very important to me because I see that the things that made this country great are now being relegated into duplicating that which is making other countries less great… I’m afraid of the trend where more and more people have the tendency to want to be given instead of wanting to give People are less willing to share. There are fewer philanthropists being grown, and there are greater expectations of the government. believe that people will come to their senses and not extend the current Administration’s quest to socialize this country. It won’t be a socialist democracy because it won’t be a democracy.”

So with Gingrich looking unviable, does that mean he’ll throw his largesse behind another candidate? “if [rival Republican candidate], Ron Paul is chosen certainly wouldn’t do that “what about front-runner Mitt Romney? “I don’t want to say, Newspapers said I had two meetings with Romney and Gingrich [on Feb. 31], which is untrue. Most of what is being said about me in this current brouhaha is just not true. I know Romney, I like him. know [Rick] Santorum; I like him. … The likelihood is that I’m going to be supportive of whoever the candidates. I just haven’t decided that yet and will wait to see what happens.”—Steven Berton

-Rul-2012 FORBESASLA | 37

 

FORBES ASIA

STEVE WYNN

CHINESE PLAYERS FIND GOOD FORTUNE IN LAS VEGAS

image009Chinese visitors to the MGM Grand in Las Vegas were often horrified at its massive lion’s-mouth main entrance and refused to walk in Bad feng shui, they said, too much like being eaten alive. They would scurry around to the casino hotel’s side door instead. Lucky for them, the entrance was replaced in 1998.

Today gamblers from China are major if largely unseen, players on the Strip. Their fascination with baccarat, which few Americans play has made it the most lucrative table game in the city’s casinos, accounting for 42% of all table action last year. “It’s very easy to keep face when you’re playing baccarat,” says David Schwartz, head of the Gaming Research Center of the University of Las Vegas. “You are casting your lot with fortune, and no matter what it brings, you meet it with dignity.”

The number of Chinese players has doubled since 2006 to more than 150,000 last year, though they still made up a tiny sliver of the 39 million people who visited Las Vegas. But when they bet, they bet big. Millions of dollars can be lost and won in a single

night in one of the private gaming rooms that became legal in the city only nine years ago. In the baccarat rooms at the Venetian, there’s a chip worth $100,000.

Getting a visa from China to the U.S. is not easy, but high rollers keep more of their winnings in Las Vegas-a better deal than in Macau, where they pay a commission of up to 40% to the go betweens who bring them from China and end them the money to play.

Unwilling to lose them to the new Asian gaming mecca, Las Vegas casinos pamper Chinese high rollers with private chefs, limos and shopping trips. And on the Strip, Chinese visitors can do something they can’t in Macau gamble on money borrowed from the house. One Las Vegas gaming executive says, “By the time they get to one of our gaming rooms, we know they are good for their losses.” -DF

…working to re-create the Las Vegas experience here,” says one, “but this is not yet recognized as a place to do business.” The Venetian’s convention hall has been dark much of the past year, say observers.

And where will the workers come from? Macau’s fast-growing population is still only 560,000, with a rock-bottom unemployment rate of 2.1%. Cotai Central alone will require 6,000 room cleaners, waiters and other service staff-and other big resort projects will also open soon. The workers won’t come from the mainland: The Macau authorities are dead set against it, worried over the impact on the local culture. And Macau and China are equally averse to large cohorts of guest workers from places such as the Philippines and Thailand.

These sorts of constraints might get Beijing thinking about a casino or two onshore—or at least in Hainan—to relieve the pressure on Macau. But the real momentum for mainland casinos comes from the endless demand from Chinese gamblers, some of whom still flock to Vegas (see above).

Beijing could start with a tiny enclave for the elite and foreign tourists near an international airport or in a big city. It could open the door to a massive complex with luxury shops, spas, restaurants, big-name entertainment, conferences and trade shows—perhaps away from the coastal cities to spur development. Which model would capture Beijing’s favor? Which casino mogul impresses it the most?

No official voice in Beijing will speak of the prospect, and everyone in the gambling loop demurs. Says Wynn: “I won’t go there.” Adelson says of mainland casinos, “not in my lifetime.” Instead he plans eventually to surround the mainland. “I’m very happy being at the edge of it,” he says, “There’s room for a number of Las Vegas-style strips,” meaning in Japan, South Korea, Taiwan and Vietnam.

The Chinese have already approved the MGM Grand Sanya on Hainan, a lavish, sprawling complex with everything an integrated resort offers except gambling (MGM Resorts International also boasts the MGM Macau, a joint venture with Stanley Ho’s daughter Pansy Ho.) The island has a large resort industry, and gaming experts say the strategy behind the project is to be in place when-notif—gambling is legalized. (MGM denies this.) There is talk of others quietly seeking Hainan concessions and that Wynn has filed applications to build resorts somewhere on the mainland that could add gambling later on. He says, simply, “No comment.”

For another model of how to proceed, Beijing doesn’t need to look far-

ther than the Wynn Macau, along Rua Cidade de Sintra on Macau’s old waterfront. It’s small compared with the behemoths of Cotai but lovingly conceived, with eye-popping decor, a fountain reminiscent of Wynn’s old Bellagio in Las Vegas, even a mechanical and multi media Tree of Prosperity and a Dragon of Fortune that rise from the lobby to swelling music every half hour. “It’s interior design as entertainment.” says design chief Roger Thomas, who

has toured the world with Wynn’s checkbook looking for artifacts, fabrics and artwork that will impress upon guests that their money is well spent. It’s easy to envision a high-end hotel along these lines in an enclave for the Chinese elite, far from the crowds of the big cities, served by limos instead of buses.

But it’s China’s rising middle class that is on Wynn’s mind as he sits back in his office after examining his new vases.

“The Chinese people hear about what we’re doing, and they have to come here,” he says, remembering the working-class European immigrants who came to his father’s bingo hall in upstate New York and later flocked to his own casinos in Las Vegas. “There are so many similarities between what drives them here and what drove my parents’ generation, the people I knew, to Las Vegas. That’s why I think of them in a way as ‘my people”.

 

A PIECE OF THE ACTION FOR MANILA

Macau has grabbed most of the casino industry’s attention over the past decade, but after 30 years of quiet casino development, the Philippines is suddenly upping the ante. Four huge cásinos are under construction as part of a megaproject due to start opening next year in Manila that will draw gamblers from across Asia. Once it’s going full tilt, the country expects to generate $10 billion a year in gaming revenue. That will easily top Las Vegas $6.5 billion last year but trail Macau’s $33.5 billion.

The four casinos will anchor the square-kilometer Bagong Nayong Pilipino Entertainment City and will see some of Asia’s richest tycoons face off against one another. Total investment is projected at $5 billion. Licenses went to Philippine billionaire Enrique Razon Jr. and his Bloomberry Resorts; the SM Consortium, backed by the country’s richest person, Henry Sy billionaire Japanese pachinko king Kazuo Okada (see box, p. 35); and Resorts World Bayshore, a partnership between Malaysia’s Genting Group, controlled by the family of billionaire Lim Kim Hua, and Alliance Global Group, a Philippine food industry conglomerate run by billionaire Andrew Tan. Okadas project and Resorts World are shaping up as the two biggest projects by land area, with the four aiming to share evenly a total of 5000 hotel rooms. Resorts World says it will open 5,400 slot machines and 800 gaming tables.

The Philippines already gets 30% of its casino revenue from abroad, led by Koreans and Chinese, and the new gambling palaces figure to attract much greater numbers of free-spending foreign tourists. One draw is the surge of cheap flights, with round-trip tickets from Hong Kong costing as little as $162 and from Seoul starting at $248. Cristino Naguiat Jr., chairman of the Philippine gaming authority, believes that gamblers will prefer the Philippines to other Asian gaming centers because they can visit tropical atolls on the same trip: “As our secretary of tourism says, it’s more fun in the Philippines.” Indeed, Naguiat is also studying a casino project in the beach town of Boracay.

All this has Steve Wynn, for one, worried that his new competitors will siphon off traffic from Macau, a concern that contributed to Okadas ouster from Wynn Resorts. Neither of the two big American casino operators in Macau, Wynn and Sheldon Adelson, have shown an appetite for projects in the Philippines.

Gamblers say they find lower minimum bets and good service in the country. “You get brought a cup of coffee if it’s early in the morning, and there’s the fact that you can smoke here as well,” notes slot player Chris Bezuidenhout, 36, of South Africa, trying his luck at the Resorts World Manila casino near the capital’s airport. -Ralph Jennings

APRIL2012 FORBESASLA | 39