The $US3.2 billion Studio City casino complex opened in Macau, the world’s biggest gambling hub, on Tuesday.I visited Macau this week, a place where East and West have prospered together for centuries and hopefully even more so in the future.
I was there for the opening of Studio City, the giant new entertainment complex that is 34 per cent-owned by Crown, of which I am a board member. It’s a $US3.2 billion ($4.5 billion) enterprise and as a director I wanted to see that we have got value for money for the shareholders.
Time will tell, but I expect we have because the real story about Macau is that it is the only city in China where you can gamble legally.
“What do you mean? People in China gamble illegally?” Louise asks. Charlie lifts one eyebrow.
Most of us have an image of Macau with its cobbled streets, old colonial buildings and all the romance of an old trading post in the what some from “the old country” still call the “Far East”.
Well, it’s true enough to a point. However, it is also the story about how a little state of a few hundred thousand people went from being nothing much more than a fishing port, with a couple of casinos that were licensed in 1962, into one of the most thriving places in Asia and one of the world’s most successful micro states. Government rolled the dice
In 2002 Macau’s 300 gaming tables and 800 slot machines generated $581 million. The revenue last year was $59 billion – seven times more than the Las Vegas Strip.
With a devotion to excellent servicing of a market, Macao Special Administrative Region of the People’s Republic of China, as it is properly known, has progressed from being an outpost of the mid-16th century Portuguese empire into one of the wealthiest places on earth.
In fact, even as a Portuguese-controlled territory it was more of a commercial arrangement than a colony. From 1557 the Portuguese paid an annual rent of 18.9 kilograms of silver a year, which is about $640 today but a fortune five centuries ago.
It seems to me that anything can be rebuilt if a market can be found and serviced well. The market for this former fishing village is the rest of China and in just over 10 years it has built an economy at an average growth rate of 13 per cent. Packing a tourism punch
Macau is now the world’s 21st most popular tourist destination, not bad for a community of just 636,000, packed into 30 square kilometres, making it the most densely populated place on earth: more than 20,000 people per square kilometre.
And if you think living that close together and gambling is a bad thing, I can tell you Macau has the second-highest life expectancy in the world and its infant mortality ranks among the lowest.
This tourism-fuelled economy creates jobs, jobs, jobs and as of 2013 its GDP per capita by purchasing power parity is higher than that of any country in the world.
It’s been a great week in Macau and an outstanding success for James Packer and the Crown company, and his partner, Lawrence Ho. James learned something from his father, Kerry, who I spent plenty of time with.
In his very direct way, Kerry would always say: “Son, you’ve got to spend a dollar to make a dollar.”
And there’s no shortcut to that. Macau shows how things can get done
Macau has proved that we need to be able to invest quickly and confidently to stay in the game, whatever the enterprise
Australia needs to take note. If we are going to build a new economy we need to just get on with it and not let regulators get in the way.
Macau’s economy has come from nowhere. I think of the bridge that had to be built between the mainland and Macau to replace the little old ferry that putted around for years.
The new bridge is 13 kilometres long and cost more than $US15 billion. It’s taken three years from thinking about doing it, to driving the first car over it.
It would take us that long just to fill out the required application forms. I accept not all agree with gaming as an industry but getting on with the job is a lesson to be learned.
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