Macau gambles on a glittering future

Macau's gaming tables draw some 10 million tourists a year to the former Portuguese enclave

MACAU, China -- The former Portuguese colony of Macau is set to announce the biggest shake-up in its casino industry in over 40 years Friday, hoping that a touch of Vegas-style glitz will kickstart its floundering economy.

The government of the Chinese special administrative region has been inviting tenders from around the world for three new casino operating licenses and some 21 companies, including several Las Vegas operators, have put in bids.

The new licenses will finally open up the territory's lucrative, though somewhat dowdy, gaming industry, which has operated as a monopoly since the 1930s.

For the past four decades that monopoly has been held by tycoon Stanley Ho and his firm Sociedade de Turismo e Diversoes de Macau (STDM).

His 11 casinos have made Macau's gambling industry one of the most profitable in the world, providing almost $5 billion in tax last year to the territory's government.

As such the casino industry has become the backbone of Macau's economy.

Stanley Ho's 11 casinos contribute more about $5 billion a year to government coffers

Under new legislation the government will grant up to three new casino-operating licenses, each of them running for up to 25 years, but not specifying the number of casinos and tables each operator may run.

Ho and his newly formed off-shoot, the Sociedade de Jogos de Macau, are hotly tipped to win one of the new licenses, with firms from the United States, Hong Kong, Britain and Malaysia fighting it out for the other two.

Tourist dollars

The government hopes that opening up the casino industry to new players will prove an incentive to spruce up the territory's ageing gaming halls, reviving the sports and entertainment sectors and drawing in millions more tourist dollars in the process.

Putting forward their bids, operators hoping to win one of the new licenses have submitted plans to invest billions of dollars in Macau developing new sporting and entertainment facilities and even hospitals.

Officials are hoping to bring a bit of Vegas glitz to Macau's gaming industry

Among the newcomers hoping for a share of Macau's casino bonanza is U.S. gaming giant MGM Mirage operator of six Vegas casinos.

Its current properties include the mega-hotel complex, the MGM Grand; the Treasure Island casino resort, complete with battling pirates; and the famous Golden Nugget casino.

Other bidders include Las Vegas tycoon Stephen Wynn who heads a U.S.-Macau joint venture proposal; and the U.S. MP Entertainment Company Limited -- a tie-up between Park Place Entertainment Inc, operator of Ceasar's Palace in Las Vegas, and Mandalay Resort Group operator of the Luxor Las Vegas, which features a 30-story pyramid-shaped hotel.

All the potential licensees are drawn by the lure of the Asian gambler, some of the highest spending casino-goers in the world.

Last year Ho's 11 casinos alone pulled in some $15.5 billion, most of which came from 10 million tourists, three-quarters of whom came to Macau purely to gamble.