G'day, George Negus. Afghanistan and East Timor in a tick. But first it's almost ten
years ago now in 1997 that the Brits handed the island state of Hong Kong back to China.
But we probably don't remember that two years later in 1999, the Portuguese also handed
back their former colony of Macau, a typhoon-ridden dot, fifty minutes by ferry from Hong Kong
with no arable land, not even rice paddies, fewer than half a million people, and less
than a sixth the size of Washington, D.C. I was actually there on assignment in the
mid-nineties and remember Macau was having two faces, the fortresses, the Catholic churches
and the food of its former European colonial masters, and also as a place that saw itself
as the emerging casino capital, the Orient. Well, last week the financial press reported
that Macau has actually overtaken the famous Las Vegas Strip in the U.S. as the biggest
casino magnet in the world. It's even attracted the eye and the investment dollars of Australia's
richest man, James Packer. Date-line's David O'Shea, always prepared to take a punt on
a good yarn, went to take a look at yet another of China's market miracles.
For 450 years it was a sleepy Portuguese outpost. Now as a special region of China, Macau has
well and truly woken up. With the passing of Portuguese rule and the border to the mainland
wide open, Macau is practically sinking under the weight of tourists from neighbouring Chinese
provinces. Last year there were 22 million arrivals. This year they're expecting 29 million.
They come here almost exclusively to gamble.
Luck is a central element of Chinese culture, and they're well known as the world's most
prolific gamblers. But it's not legal in mainland China, so Macau fills that gap. And the amount
of Chinese money flowing through Macau's 26 casinos is staggering. Last year it was
more than 7 billion U.S. dollars.
Well the numbers here are just off the charts, phenomenal what you watch and what happens
here. We'll walk by and somebody's betting 20,000 U.S. a hand there. That's on the main
gaming floor and you're like, that's 20,000 a hand. Back home we're all standing around
waving and it's an apocrypid and whatever you want, sir. And here it's kind of like
it's, I don't want to say it's the norm, but you'll find that on the main gaming floor.
You can smell new money everywhere, courtesy of the economic boom in China. I've just seen
a man betting the equivalent of 125,000 Australian dollars per hand. But I'm told this is nothing
and bets twice that amount are common here. And there are stories of gamblers winning
and losing millions of dollars in a single sitting.
You'll have some huge swings where I will leave at the night we're losing five million
dollars and in the middle of the night I get a phone call, you know, we've got it all back
and we're winning three million and then you wake up and you're back to losing four
million again. It's just like I said, the numbers are just staggering.
Just as staggering is the amount of casino development underway.
For long time residents of Macau, like Isabel Estorninho, it's all happening too quickly.
I don't think it's a healthy environment. And of course, besides not having parks and
not being a very confined place, and lack of education about gambling, the dangers of gambling
because this has grown too much too fast, like a dream.
Macau today is almost unrecognisable compared with the one she grew up in. Whole sections
of the new city are built on land reclaimed from the sea and it's now become one of the
most densely populated places on earth. This is now a main road, isn't it? Yes, and there's
a bridge. Yeah, yeah, very busy road. So this is now where all the casinos are, right in
the middle of the water. But Macau's history is one of change and the pace is picking up.
What I've learned is that Macau has always been changing this way. People who only live
here a little while, people who only live here five years, 10 years, 20 years, when
you arrive will always tell you it's ruined now. It's too bad you weren't here 10 years
ago when I arrived. It's too bad you weren't here 20 years ago when I got here. It was
real Macau then. No, for 500 years Macau has been doing that. It has reinvented itself.
Every time there's a new market available, Macau completely reinvents itself. Every time
the Chinese make a new law about you can do this or can't do this, that, Macau reinvents
itself. Bill Guthrie is a professor of sociology at Macau University and he's lived here for
11 years. Bill's rule, if you're walking on flat land, you are not walking on Macau.
He took me for a walk along what used to be the beachfront. All this stuff in front of
you as you look out all the way across here to the major modern construction of Macau
is all stand on river bottom. But it's another patch of reclaimed land that will change the
face of Macau forever. Just as Las Vegas rose from the Nevada desert, the Kotei Strip is
rising from the sea. It's a multi-billion dollar development being driven by Americans
who can now invest directly in China. China has always allowed Macau to do what it doesn't
want to be seen doing itself. This time it's gambling. When it opens later this year, the
Kotei Strip will be like a mini city. Tens of thousands of suites, convention centers
and themed casinos. The centerpiece is the Venetian, a much larger replica of the one
in Las Vegas. These are the first real monuments of Macau. All the rest of this stuff is transitory.
All these old buildings that look old, they're 20th century. The Venetian, the Macau Tower,
these gigantic concrete structures, they are going to be here for a long time and they
are going to define people's idea of what Macau looks like. The main developer of the
massive Kotei Strip project is the 73 year old Las Vegas based billionaire Sheldon Adelson,
the sixth richest man on the planet. When he opens it later this year, the Venetian
will bring a little bit of Venice and a lot more Vegas to Macau. None of the world's
self-respecting billionaires want to miss out on the action on the Kotei Strip. Virgin's
Richard Branson will be setting up a casino resort soon and James Packer is opening a
place nearby called City of Dreams featuring an underwater casino. All of it built on reclaimed
land. This is not the destruction of the Great Barrier Reef that's happening here. This is
an invented place and all they're doing is inventing more of it. I don't see the crime
in that. There's nothing being destroyed here except history and history destroys itself.
A 40 year gambling monopoly in Macau ended in 2002. Sheldon Adelson scored one of three
lucrative gaming concessions and can now open as many casinos as he likes.
His first, the Sands Macau, returned its $265 million investment in its first year.
On opening night there were stampedes to get inside.
Adelson's Chief Executive Officer Mark Brown is practically salivating at the thought of the
market on his doorstep. There's actually three billion people in a five hour radius, you know,
flight to get here. We plan on building our own infrastructure as far as getting people around,
getting people here. The amount of buses that we're purchasing, we're buying ferries, we're buying
planes, we're buying helicopters. The government is working tremendously with us to also help.
I keep going back to the government because we have to do a lot of work on the border system,
the borders, what time they close, what time it opens. It's right this moment. It doesn't work
with our schedules, so we would love for the borders to be open 24 hours. I doubt if we get
that on, but if we can stretch that a couple hours on each side, that would be helpful.
It's another opening night for another new casino, but this is no ordinary premiere.
The Grand Lisboa belongs to Macau's most powerful man, and it's his answer to the foreign
invaders. The empire is striking back. 85 year old Stanley Ho wields enormous influence in Macau.
He made his fortune through his 40 year monopoly on gambling. He owns much of the land and with
this one, 17 of the 26 casinos. Another of the richest men in the world, Ho started his career
as a smuggler, winning the people's hearts by helping to feed 400,000 post World War II refugees.
With luxury to rival the new American casinos, the Grand Lisboa is Stanley Ho's new flagship.
He says the Americans promise to bring in high rollers from overseas,
but he believes that they just want to steal his customers, the Chinese.
But there have always been questions about Stanley Ho's alleged connections to organised crime,
which he has repeatedly denied, and he's failed in bids to win a licence in Australia.
Long before the casino building Frenzy, Macau was known as the world's largest laundromat,
a reference to money laundering. But Ho is not the type to give much away.
When you're talking about organised crime in the United States, I think everybody automatically
assumes that you're talking about incredible evil, about drugs and sex and forced sex and so on and
so forth, and all that that goes on. The illegal business in China just meant business, and Macau
basically did business with China. And so you have to draw that line through Macau,
you have to start talking about what the business is.
As I watched the glitterati from Hong Kong, Macau and China arrive for the grand opening of
Stanley Ho's casino, I spotted a fellow Australian. Getting in on the action is James Packer.
Australia's richest man is betting big on Macau's future.
After winning a concession with Stanley Ho's son, he's investing billions of dollars here.
He knows the Australian scene very well. However, whether he can translate that knowledge into a
purely Asian market remains to be seen. There are very steep challenges ahead for him and his team.
Ben Lee is a former Packer employee from Crown Casino in Melbourne. He's now the general manager
of the small lower end of the market Diamond Casino in Macau. He wonders whether Crown is a
strong enough brand. It's already an extremely competitive industry. Crown will be here against
the big boys. Not to mention the local incumbent and the big boys from Vegas, MGM,
Sands Venetian, Steve Wayne, all of whom are known internationally. Crown International is also
well known but only in a very small Venetian limited market segment.
Lee believes Packer made a great start when he chose Stanley Ho's son, Lawrence, as his local
partner. It would sound like a perfect partnership. It's a typical East meets West situation.
He's extremely influential here. He's got quite a complex and wide reaching setup. I don't believe
he could have found a better partner than Lawrence Ho. Ho Jr and Packer are due to open Crown Macau
next month. Other casinos will follow. And like I said, anybody who comes to town here is going
to be very successful. There's enough, there's enough here for all of us to go around. Have you
met Jamie Packer? Handshake, hello. Yeah, very, very quickly. And his partner Lawrence Ho, have
you met him? Yes, very, very nice guy, nice man, very intelligent. And like I said, he's a great
partner. So the two of them together will be very successful. Packer seems to have fallen on his feet.
The Beijing appointed Governor of Macau, Edmund Ho, who is no relation to Stanley or Lawrence,
seems genuinely happy to see Mr. Packer. Here, appearances mean everything. And Packer should
be happy with his seat and his face on the big screen. He's between the two most powerful
men in Macau, the Governor and the Casino King. What are people saying about James Packer
on the Casino Grapevine here? What's the impression of him? There's not too much talk about James
Packer. The industry is mainly about the American operators. The Crown team has been fairly low
profile to date, from my observation. And I think that there are probably some trepidations about
the viability of Crown Macau. A lot of people are saying that no one can fail in a market with
three billion in such a short radius around Macau. But you think that it's not so certain for him?
Nothing certain for sure here. We've had some casinos open recently and their targets, their
figures are definitely not hitting the target. And they're probably our call the mid-sized
operators. So not as large as Crown, but similar. So they are already clear presidencies that
unless your location is right, unless your marketing, your product is right,
there is no such thing as guaranteed success.
As the spectacular ends, the queue to get into the new casino snakes around the block.
There is clearly no shortage of gamblers to fill the main floors
of any of the casinos in Macau. But the real battle is for the high rolling VIPs.
This is a secretive world and many high rollers from China don't even give their names.
And that creates two problems for some of the operators, the Western operators like the Vegas
mob, in that they have to know the names of the customers before they're allowed into their
commission program. So just to be clear, some of these high rollers that are betting up to
you know a million Hong Kong dollars a hand don't even want to give their names.
That's absolutely right. What steps are you taking or what concerns do you have that a lot
of this money is coming from corrupt sources? Do I have concerns about that? I don't think
the money is coming from corrupt sources. But some of it may be from China.
Some money might be coming from corrupt sources all over the world. It's no different here than
it is anywhere else. In this part of the world there's a complex nexus between crime, politics
and business. It's common knowledge that the organized crime triads operate behind the scenes.
This city is known for its history of crime, of vice, prostitution, money laundering,
criminal activity connected to the triads. Is all of this still a concern, still a problem here?
Well, this is something you should ask the authorities, Macau authorities, not myself,
but I can only say that I lived here before the end over and I lived here and my family
lived here for some periods and never had any problems either before or after. It's one of
the safest cities in the world. Of course, it's known that there are triads working in Macau,
but for the common people, for the common citizens of Macau, this is something that we don't feel
the presence of. In gambling there are always more losers than winners. And directly opposite
these temples to Mammon, the God of Greed, is this once quiet little church built in 1835. With
only months till opening of the new casinos, Father Louis Chavier is worried about the impact on
society. He's already inundated with gambling addicts. You mentioned that every day, every morning
people come to you, Father, can you lend me 500 of attackers because I lost my money, I don't have
mental where to Hong Kong. That happened? This happened very frequently and then we cannot,
we cannot afford to meet all these requests. Macau's youth are flocking to relatively well
paid work in the casinos. There are even schools to train staff as competition for the best employees
becomes fierce. Gilberto studied architecture, but he now works in a VIP room at one of the new casinos.
He arrives late for the family dinner. They're from the minority Macanese community,
part Chinese, part Portuguese, and his Isabel Estorninho's nephew.
He does a little bit of public relation for the casino to take care of the high rollers.
Is he the first one in your family working in a casino?
Yes, he is. Is he the last one, do you think, that will be working in a casino?
I don't know, maybe not, because with so many casinos around, it's hard to say. Maybe I will go
and work there, you know, if they pay me well enough. Vanessa, this is my niece, Vanessa,
she's studying in Australia, yeah, in Peruz. It's here on holiday.
So you think you'll end up working for a casino one day?
Well, I don't know, maybe, maybe, if I'm coming back, maybe, but well, I hope not, but we never know.
It's just moving too fast, and there's no planning, casinos are everywhere, there are no restrictions
of anything, so anything goes basically, and it's ruining Macanese. I don't like it.
What, when you say ruining, you mean, you mean culturally or physically?
In every aspect, even socially, I think it's ruining it. Yeah, you can't have a casino in front
of a high school, for example, but it's allowed in Macal. There's no, there are no zoning restrictions.
Kids can't go into casinos until they're 21, but they can work in one if they're 18.
These things are totally unacceptable. Totally unacceptable. Not a place to raise my kid.
So what will you do? Move him away. Where to?
The States. As big as. That's where he's moving, his grandchildren.
