Mass market push in Macau as Paris-themed mega resort opens

Billionaire casino tycoon Sheldon Adelson predicted a revival for beleaguered Macau Tuesday ahead of the launch of his Paris-themed mega resort, as the gambling enclave bets its fortunes on mass market tourists.

A corruption crackdown by Chinese President Xi Jinping and an economic slowdown since mid-2014 drove away many mainland high-rollers who had propped up the VIP sector in semi-autonomous Macau -- the only part of China where it is legal to gamble.

The former Portuguese colony has struggled to recover its footing ever since as it comes under pressure from Beijing to diversify away from gambling.

But August saw gaming revenues end a slump that had lasted more than two years, with analysts putting the rally down to a new raft of massive resorts trying to entice mass market gamblers and non-gaming tourists.

Sands' $2.9-billion resort, The Parisian, opens its doors Tuesday evening, boasting a half-size replica of the Eiffel Tower, 3,000 rooms, a water park and a 1,200-seat theatre.

"We are optimistic that we have hit the bottom," said Adelson.

"Macau still has very good days to come."

But Adelson said the bounceback was likely to be gradual and it remained to be seen how long the recovery would last.

Sands would now turn its attentions to trying to develop casinos in other Asian markets, including Japan and Korea, he added.

The Parisian will host more than 400 gaming tables, with around 12 percent of them expected to be for VIP high rollers, but it is billed as an "integrated resort" complete with street entertainers, Paris-inspired shops, performance and conference space.

"Other locations... are trying to pick up the excess (VIP) market that is no longer here," said Adelson.

"The mass market will always be here."

Adelson was confident Sands' concession would be renewed when licences come up for review in 2020 because of its non-gaming emphasis.

He said he would be "disappointed" if The Parisian did not break even within four years.

- Positive growth -

It is the second launch by Las Vegas stalwarts in a matter of weeks, after the $4 billion Wynn Palace -- home to a giant lake, musical fountains and cable cars, as well as gaming tables -- opened in August.

Recent launches by Galaxy and Studio City have also upped the non-casino element, including everything from river rapids to an elevated figure-of-eight ferris wheel.

The resorts have helped boost gaming revenue, which saw a 1.1 percent rise in August to 18.84 billion patacas ($2.36 billion), compared to the same month in 2015.

"We think the remaining few months of the year will show positive year-on-year growth (in gaming revenues) and we are looking for 10 percent growth in 2017," said Aaron Fischer, gaming analyst at brokerage CLSA.

"Most of that growth will come from mass market driven by the expansion in hotel capacity."

Although the VIP market has collapsed, it still accounts for 50 percent of industry revenues, added Fischer.

"The capital in VIP is very low, so it still generates a nice return for each of the gaming companies."

Macau overtook Las Vegas as the world's casino capital in terms of revenue after the sector was opened up to foreign competition in 2002.

It still leads its US counterpart despite the downturn.