Macau: where China likes to spend it

Macau: where China likes to spend it

Chinese workers are industrious, committed to saving – and willing to gamble enormous sums in Macau's sprawling casinos

Patrick Collinson

The Guardian, Saturday 5 March 2011

Some of Macau's enormous casinos including the Wynn, left, and Lisboa, centre left

You won't find the Paiza Mansions on TripAdvisor. You can't even book the world's plushest hotel – it chooses you. The 6,000 sq ft suites (the size of five semi-detached houses) are reached by private elevator, and come with two butlers and a masseur. Yet it costs nothing to stay there. The surprisingly tasteful suites (despite the 60in end-of-bathtub TVs) are completely free. There's just the small matter of a HK$10-15m (£800,000-£1.2m) that invitation-only guests are required to spend downstairs at the casino.

The Paiza Club and Mansions are part of the Macau Venetian, the world's largest casino, and the fifth biggest building on the planet. And every time you buy something with a Made in China label, much of the money eventually ends up here.

Las Vegas is puny in comparison. Chinese punters bet around £70bn on Macau's baize tables (they prefer baccarat) last month alone. This year it could reach £1tn, an almost unimaginably colossal sum. Think of all the cash issued from all the UK's ATMs last year. Then multiply it by five.

Macau's casinos – the Venetian, MGM Grand, Wynn, Sands, Lisboa, and many, many more – skim around 2.5% from punters, giving them net revenues in February alone of HK$19.9bn (£1.6bn). The enormous Galaxy, Hilton, Sheraton and Shangri-la hotels and casinos are still under construction on Macau's new strip, yet the city is already raking in five times more money than Vegas. "Macau is not the Las Vegas of the East – Las Vegas is the Macau of the West," says veteran casino expert Justin Casey of consultants APG. Yet seven years ago there was just one casino on the peninsula.

It's lunchtime on a Tuesday in February, and the skies above the former Portuguese colony are a smoggy grey. The sea is a dirty brown, carrying the effluent of the thousands of factories further up the Pearl River, the world's greatest concentration of industry.

But already the Venetian is half-full with visitors streaming over the border with mainland China. The casino, three times the size of its sister complex in Vegas, cost £2bn to build, and as we walk through acres of baccarat tables, the hospitality manager (he looks after 3,000 bedrooms) tells me the floorspace could accommodate 100 jumbo jets. By the end of the day – a quiet one for the complex – more than 65,000 punters have come through the doors.

When Deng Xiaoping began the post-Mao economic reforms in China, he didn't anticipate this. The country's industrial revolution has spawned literally millions of millionaires. While the factory workers are bussed into the smoke-filled Lisboa (think Brighton Pier, if it stretched to France), the factory owners are helicoptered into the VIP suites. 70% of the money wagered on Macau's tables comes from the wallets of the Chinese super-rich.

But Chinese law forbids its citizens from taking more than 20,000 renminbi (£1,800) over the border. So Macau's billions rest on a very Chinese solution to capital controls.

On the mainland, wealthy punters deposit their money in what are called "junkets," organisations widely believed to be controlled by triad gangs.

Once in Macau, the junkets dispense the money back to individuals, and extend credit, often two to three times the amount originally deposited with them. They bring the VIPs to the casinos, and are paid huge commissions. Back on the mainland, punters who fail to pay up face menacing debt collectors.

In each major casino, the junkets have lavish gaming rooms on private floors reserved solely for their VIP punters, prepared to buy a bare minimum of £20,000 in gaming chips.

The public are not just roped off, few would even know of the existence of the private rooms. A small army of security guards keeps the public far from view, and hundreds of CCTV cameras observe every move. But Guardian Money obtained access to several of the rooms. In the first – and this was a Tuesday afternoon – were around 20 VIPs, mostly male. Every single bet was for a minimum of £1,600. In the evening it would rise to £3,200. A second room was empty. A third junket room had around 40 players, again playing at £1,600 a hand. The thickly-carpeted corridor, the width of a big SUV, stretched hundreds of feet, leading to scores more VIP rooms.

Back on the smoke-filled "mass market" floors, the minimum bets are typically £20– significantly higher than Vegas. But there are no free cocktails or slot machines. There aren't even smiling faces. Gambling here is a serious business.

Why China's industrious workers, the world's greatest savers, will squander it all on baccarat remains a mystery even to China experts. "The Chinese believe in luck. They are willing to gamble a big fraction of their net worth," says gaming analyst Huei Suen Ng of Credit Lyonnais Securities Asia. But she acknowledges that this doesn't quite explain what is going on. "Maybe it's just our culture, maybe it's in our genes," she says.

The other rather less acknowledged factor is money-laundering. The junkets take in Chinese renminbi (which cannot be converted on the world's money exchanges) while the casinos can pay out in dollars. Some critics believe Macau is a gigantic operation for secreting money away from the eyes of the Chinese state. Suitloads of dollars take the short hop from Macau to Hong Kong, much of it pouring into the city's white-hot property market. Even bigger sums are believed to head into offshore tax havens.

The authorities, for now at least, turn a blind eye. The casinos are a huge cash cow for the Chinese state, too, which levies tax at 39%. If Macau gets out of hand, Beijing can turn it into a desert overnight by refusing internal visas to mainland Chinese. But the casino operators think that unlikely – as the money might instead switch to Singapore, away from Chinese control, where two new mega-casinos are already close to matching the whole of Vegas in takings.

Visitors from America or Europe won't be flocking to Macau's polluted shores, and average room rates – close to £160 a night – would in any case deter them. It is a uniquely Chinese place, with hangar-like casinos encircled by Gucci and Louis Vuitton shops. Vegas-style entertainment is thin on the ground, swimming pools are unused, and nightclubs rare. The average Chinese visitor spends 1.6 days in Macau, and uses the time to gamble non-stop. Prostitution is legal, though pimping is not. The daily parade of sex workers in a mall below the Lisboa dubbed "the Race Track" draws organised tour groups with cameras, rather than many real punters.

The Venetian's gondoliers in the miles of fake canals sing Volare, and our chanteuse had even sung in the Sydney Opera House, but makes better money in Macau. A water fountain show in front of the five-star Wynn evokes Vegas, but the backdrop of Chinese casino architecture is so extraordinarily vulgar it makes Vegas look almost charming.

But Brits can make money from the tables of Macau without going anywhere near China. Shares in casino operators are among the most popular investments in many emerging market and China funds – though ethical investors may wish to steer clear of what one of my fellow journalists called the new Sodom and Gomorrah.

Macau's casinos are the world's most profitable – some repay billion-pound construction costs within a year. London-based Neptune Investment Management, which manages more than £100m in its China fund on behalf of British investors, has put around 8% of the fund into shares in Sands, which owns the Venetian, and Wynn.

Back in the Paiza – the word is taken from a Marco Polo story – the suites are strangely quiet despite the hotel's insistence that occupancy rates are 90% or more.

Insiders explain what's happening: VIPs check into the multimillion-pound suites then head straight to the private tables. "Over 48 hours, they will gamble for as much as 46 hours. The suites are used just as washrooms, really."

Patrick Collinson was a guest of Neptune Investment Management in Hong Kong and Macau

Betfair moves business to Gibraltar

Betfair moves business to Gibraltar

Betfair, the online betting exchange which floated in October 2010, has announced its decision to operate under a Gibraltar licence and move its technology infrastructure to Dublin.  The company claims the move will add £10m to profits in 2012 and thereafter a further £20m annually.  The group intends to keep its corporate base in Britain safeguarding the jobs of its 1,200 staff.  Although Betfair will no longer be liable to the 15 per cent tax on gross profits, it will pay corporation tax in the UK.  Chief financial officer Stephen Morana hit out at British gambling regulation saying the licensing regime doesn’t work and that the review of remote gaming being undertaken by the Department for Culture Media and Sport was unclear.  William Hill and Ladbrokes moved their internet operations offshore in 2009.

States Make Play for Web Gambling

BUSINESS MARCH 2, 2011

States Make Play for Web Gambling

By ALEXANDRA BERZON

Online Casinos 

Efforts to legalize online gambling in the U.S. are moving to the states as lawmakers roll the dice on bills that aim to steer around federal laws effectively prohibiting Internet wagering.

Journal Community

The first real test of the state efforts comes this week in New Jersey, where Gov. Chris Christie is expected to decide the fate of a bill that would let Atlantic City casino companies run gambling websites for state residents.

The battle to legalize online gambling in the U.S. is moving to the state level as legislators try to push through state laws that could circumvent a federal ban on Internet gambling. Alexandra Berzon has details.

The bill would make New Jersey the first state to sanction online gambling. The Republican governor, who has until Thursday to veto or sign the bill, hasn't publicly stated his stance.

Regardless of Mr. Christie's decision, gambling experts say momentum is growing behind states' efforts to legalize online gambling for their own residents, known as intrastate gambling. Last week, Iowa lawmakers introduced a bill to legalize online poker, and California and Florida are among other states considering similar bills.

Once one state passes an online-gambling law, "you will see other states go 'aha.' It will spread very rapidly," said Anthony Cabot, an expert in Internet gambling law.

The debates over online gambling come as states scramble to balance their budgets in the face of yawning deficits.

In Wisconsin, Gov. Scott Walker proposed a two-year budget Tuesday cutting more than $1.25 billion in state aid to schools and local governments. The Republican governor said the deep cuts and a separately proposed bill restricting state workers' collective-bargaining rights are necessary to address a $137 million shortfall for the fiscal year ending June 30 and a projected $3.6 billion deficit for the following two fiscal years.

Backers of online gambling initiatives stress, in part, the allure of capturing new revenue for statehouses. Casino gambling has been expanded in several states in the past few years—including Pennsylvania and Florida—based partly on that argument.

In New Jersey, however, under the bill passed by the legislature nearly all of the money would be allocated to the horse-racing industry, which had been receiving payments from casinos in exchange for preventing gambling expansion at racetracks. Other winners could include companies that provide software for online gambling, and they are backing the proposal.

The push to allow intrastate online gambling is a new tack in a long effort to legalize online gambling in the U.S. It was effectively outlawed in 2006 when Congress banned financial companies from processing gambling transactions across state lines.

Bills pushed by big casino companies to create a federal law legalizing online poker failed in Congress late last year, and prospects for such bills haven't improved.

Casino gambling for much of the country's history has faced loud opposition from those who considered gambling wrong either for moral or social reasons. Indeed, gambling addiction treatment providers said they were concerned that the easier access that online gambling provides could lead to addiction problems.

But in recent decades that opposition has been drowned out by gambling interests, which have succeeded in pushing casino expansion through state legislatures, often using the argument that states should benefit from revenue from residents who are gambling at casinos in nearby states anyway.

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The push to allow intrastate online gambling is a new tack in a long effort to legalize online gambling in the U.S.

Now, people involved in online gambling discussions say some proponents are also turning efforts toward statehouses. "I think you're seeing a shift in focus because the thought process is that if several large states legalize, that will put pressure on the feds to act," said Nick Iarossi, a gambling lobbyist in Florida.

The state efforts, proponents say, would steer clear of the federal ban by limiting access to the sites to people using them from inside the state, which proponents say is technologically possible. But the legality of the proposals is murky under some state constitutions. The U.S. Department of Justice has long taken the position that nearly all forms of online gambling are illegal in the U.S. It hasn't weighed in publicly on the state proposals.

Some key gambling interests, including some offshore Internet companies, some casinos and Indian tribes, oppose the state measures. On a recent call with analysts, the chief executive of Caesars Entertainment Inc., which has casinos throughout the country and also owns the popular World Series of Poker brand, said the company hadn't given up on the possibility of a change in federal law and wasn't ready to support the state-by-state approach.

Two websites that operate from foreign jurisdictions—Poker Stars and Full Tilt Poker—have come to dominate the U.S. and international online poker scene, even though the Justice Department considers their actions illegal. Even though transactions are complicated for players because financial institutions are barred from accepting their payments, around 10 million people in the U.S. play poker online, according to the Poker Players Alliance, a group for online poker players in the U.S.

In New Jersey, the bill passed through both houses of the legislature in recent months with overwhelming support of both parties. But hurdles remain. Mr. Christie could conditionally veto the bill, which would send it back to the legislature with changes, according to a person familiar with the matter. The bill would likely be derailed if he said it required an approval by voters. A recent poll found that 67% of New Jersey residents polled oppose Internet gambling.

Proponents argue the state would benefit. "Revenue is leaving the state to offshore Internet gaming and we should recapture those revenues for New Jersey and create jobs in New Jersey," said Raymond Lesniak, a state senator, who argued the state could become a hub for the industry if the state is the first to legalize Internet gambling.

Mr. Lesniak estimated the new law would bring the state around $30 m

Journal CommunityDISCUSS

Wasn't all that long ago we were told the lottery was the cure all for our States' fiscal problems. How'd that work out ?

—Richard Sullivan

illion annually in taxes to New Jersey based on an estimate that it would produce $200 million in revenue.

The tax revenue wouldn't necessarily be a boon for state coffers, though. New Jersey would dole out the tax money to the horse-racing industry to make up for the loss from casino subsidies that have expired. That tax would drop substantially after five years under the current proposal. An additional $12 million would be collected for the state's casino fund that gives money to elderly and other health services.

For the state, that money is likely to be offset somewhat by lost revenue from New Jersey residents who now visit Atlantic City casinos. One study commissioned by supporters of the bill and conducted by Econsult Corp. estimates that online gambling in New Jersey would lead to a 5% reduction in Atlantic City casino revenue, which it estimates would represent a $48.8 million shift from casinos to Internet gambling. However, the casino companies would operate the online sites and the losses would more than be made up, according to the study.

The state Office of Legislative Services concluded state revenue would increase as a result of the bill but said there was too much uncertainty surrounding online gambling to predict the amount.

There have been previous efforts for online gambling at the state level. Nevada passed a law legalizing such gambling for betters nationwide in 2002, but it was shelved after the Justice Department advised the state against allowing it.

Illinois is waiting on a ruling from the Justice Department on whether a plan to allow wagering online through the state lottery would be allowed. Other states, including Minnesota, already offer limited online lottery betting.

—Lisa Fleischer contributed to this article

UB.COM Launches 2011 WSOP Satellites

UB.COM Launches 2011 WSOP Satellites

7 March 2011

MIAMI, Florida -- (PRESS RELEASE) -- There's nothing bigger in the world of Texas Hold 'em than the World Series of Poker ("WSOP"), and the easiest way for players to make their way to Vegas to be part of that tournament rush is to win a seat online. This year UB.com, the cool crew to hang with in Sin City, is giving players a shot at millions in dollars and Main Event glory with its 2011 WSOP satellite schedule and a revamped Show Up, Get Paid promotion, set to kick up the stakes a notch, from Sunday, March 6th.

Qualify on UB by winning a 2011 WSOP* Main Event Package worth $12K, either all the way from a 10 cent STEP 1 tournament, or by crushing the competition in one of the many $500 30 buy-in Super Satellites from March 6th to July 3rd ( satellite qualifiers for as low as $10 will run for every $500 30 Super Satellite). Plus, UB will host two 25-seat Guaranteed tournaments at 16:00 ET on Sunday, June 12th and on Sunday June 26th, set to award at least 50 WSOP* Main Event packages across the pair of big seat giveaways.

"With Show Up, Get Paid we are making it even easier for our players to make their way to Vegas for the WSOP in 2011, plus there's so many different ways for players to qualify," said Team UB's Joe Sebok. "The Team UB crew will be out in full force this Summer so you never know, you may wind up chatting poker with Prahlad Friedman or sharing strategy in the UB suite with Maria Ho or Eric Baldwin. Be sure to win your seat on UB and get there!"

It makes no difference how a player wins their seat, just as long as they do it at UB.com. The online poker site is putting hundreds of thousands of dollars on the table through its Show Up, Get Paid promotion. Qualify at UB.com, turn up at the tables in Las Vegas, and take a seat in the Main Event sporting the UB brand; you automatically bank the $1,000 cash bonus even if your Aces get cracked, you suffer a bead beat and bust early on -- just for showing up, and all before the cards are even in the air.

There'll be no exiting empty-handed, because that $1,000 is guaranteed, and it keeps on growing as a player runs deeper into the action of the world's richest annual poker marathon, awarding up to $20,000 for surviving the competition long enough to make it to Day 8 of play.

There's also more money up for grabs in the form of a final table sponsorship deal to players who go deep enough to score a place in the November Nine. No matter how much longer a player survives this final fling at the felt, there's extra money to pocket, up to a cool $1 Million just by representing UB at the WSOP* final table.

Rounding out the list of Vegas promotions is a competition that makes it worthwhile for poker players to win multiple $12,000 WSOP* prize packages. The "King of Satellites" leaderboard competition will award over $10,000 in Tournament Dollars to the top 5 players who win the most Main Event seats. The extra Tournament Dollars are in addition to the $12,000 in cash that players will receive for each extra seat won.

So, there's no doubt about it, Team UB will have the edge at this year's WSOP*. Qualify for the Main Event at UB.com to experience the ultimate Texas Hold'em tournament on the world's biggest stage, and hang with some of the game's best-known pros, including Team UB Pros Joe Sebok, Prahlad Freidman, Eric Baldwin, Brandon Cantu, Adam Levy and Maria Ho.

Poker Player Writer Roy Brindley Signs With Victor Chandler Poker

Poker Player Writer Roy Brindley Signs With Victor Chandler Poker

4 March 2011

DUBLIN, Ireland -- (PRESS RELEASE) -- Victor Chandler Poker is pleased to announce it has signed well known poker player, writer, author and commentator Roy "The Boy" Brindley as Team VC Captain and Resident Pro.

Brindley will represent Victor Chandler Poker at upcoming European Masters of Poker events around Europe where he will act as host, coach, and captain to Team VC players at each event.

Additionally Brindley will write regular reports about VCpoker.com's qualifiers progress at EMOP events for the site.

Andy Horne, head of poker at Victor Chandler, said, "We are very happy to have Roy "The Boy" captaining Team VC at EMOP and we are sure that his presence at the live events will have a positive effect on the performance of the Team VC players. Roy brings a wealth of knowledge and experience to the table and is highly capable of imparting sound advice and strategies as well as winning the odd event himself.

"Ultimately we wish for our players to have as enjoyable a time as possible at the EMOP events as well as to be given every opportunity to succeed and we have every confidence that Roy will make that wish a reality for all concerned."

Roy "the Boy" Brindley added, "Poker has become way too serious in recent years. Yes we are all chasing a life-changing result but you have to accept that winners inevitably outnumber losers by a ratio of nine-to-one in tournaments and, consequently, it's prudent to view 'a cash' as reason to rejoice and elimination an excuse to party!

"I can promise Victor Chandler's EMOP qualifiers plenty of the latter and hopefully some of the former at the EMOP's superb venues starting in Portugal in just three weeks time."

Four New Slots Debut At All Slots Casino

Four New Slots Debut At All Slots Casino

7 March 2011

KAHNAWAKE, Quebec -- (PRESS RELEASE) -- All Slots Casino, a leading online slots casino, is thrilled to welcome four new slot games this March, each with a distinct theme, brilliant graphics and thrilling bonus features. Slots aficionados will be treated to double loyalty points March 7th-9th on Eagle's Wings, Party Island, Retro Reels Extreme Heat and Asian Beauty video slots at All Slots Casino.

In the Spotlight: Eagle's Wings Video Slot

Players at All Slots Casino will be flying high on Eagle's Wings, a 5-reel, 25-payline slot game with an uplifting North American design. Stacked Wild symbols will double players' payouts and create additional winning opportunities when substituting for winning combinations. If three or more scatter symbols appear, up to 60 free spins with tripled payouts will be triggered. Free spins can be retriggered for even bigger winnings.

In addition to Party Island and Asian Beauty, All Slots is excited to introduce Retro Reels: Extreme Heat. This sizzling slot includes the revolutionary Re-spin feature, allowing players to re-spin individual reels for the chance of improving their results. The popular Free Spins feature is also available on this slot, awarding up to 20 free spins with doubled payouts, for a jackpot of up to 440,000 coins.

"All Slots Casino is proud of its wide variety of slot games," said David Brickman, Jackpot Factory's Vice President for Player Affairs. "We're looking forward to spicing things up with four new online slot machines offering great features like free spins, re-spins, payout multipliers and entertaining bonus games."

Jackpotcity Creates Fund For Australian Flood Relief

Jackpotcity Creates Fund For Australian Flood Relief

8 March 2011

GIBRALTAR -- (PRESS RELEASE) -- JackpotCity Online Casino, one of Australia's favourite online gaming destinations, has created an Australian Flood Relief Fund to raise money for those Queenslanders affected by the January 2011 floods.

Staff at JackpotCity.com Online Casino didn't hesitate to donate from their own pockets and raised AU$2,170. To applaud their generosity, the casino management decided to double that amount and added a further AU$2,170 to the fund.

In addition to the funds raised by the staff and management at jackpotCity.com, the decision was made to contribute all proceeds from the January 2011 Boomerang Australian Pokies Tournament Series. This helped to raise a further $660 for our flood fund.

The funds collected by staff and players came to a total contribution of AU$5,000 and was donated to the Queensland Premier's Flood Relief Appeal. When asked why the casino staff were willing to donate money from their own pockets Claire Anderson, the JackpotCity.com Online Casino Promotions and Events Coordinator, had this to say:

"It is not just the fact that we here at JackpotCity.com employ a number of Australians, including myself, it is the fact that human tragedy transcends country borders. We wish all of our Australian and Queensland players all the best during this trying time and hope that the AU$5,000 can be put to good use."

Intercasino Celebrating Two Anniversaries

Intercasino Celebrating Two Anniversaries

8 March 2011

LONDON, England -- (PRESS RELEASE) -- InterCasino is celebrating two anniversaries this March: 15 years online and 100 years of International Women's Day.

To mark the occasion, InterCasino is leading the revolution with a mighty 115% wlcome bonus and a slots tournament that celebrates both women and their independence. Featured games include Cleo Queen of Egypt - starring history's ultimate feminist - and the sassy, new, tattoo-themed slot Noughty Crosses.

New players are invited to enjoy a radical 115% sots-only first deposit offer, worth up to GBP230. All players can take part to an all things female slots tournament to grab a share of the GBP11,500 prize pool.

Commenting on the March promotions, Regis Pissot, Head of Casino at InterCasino, said:

"Demonstrations marking International Women's Day were the first stage of the Russian Revolution of 1917. On March 8, 2011, this special day is celebrating its 100th anniversary."

He added: "The revolutions made by our online slots have changed many lives during the 15 years InterCasino has been in business. In May 2007, we paid out the biggest online Jackpot in history, awarded by our Progressive Slot "Millionaires Club", and in February 2011 alone, we paid out a total of more than GBP70m."

InterCasino's March 115% wlcome Bonus and the GBP11,500 themed slots tournament are designed to give online casino players the chance to start their own revolution.

InterCasino is the longest running online casino the world, launched in 1996. The site provides a large variety of the most popular and well-known online casino games, video games, and slot machines from around the world.

Bodog Deals One Billionth Blackjack Hand

Bodog Deals One Billionth Blackjack Hand

8 March 2011

LONDON, England -- (PRESS RELEASE) -- Bodog, the world's largest betting brand*, has just dealt its billionth hand of blackjack; a world first for online casinos. As one of the first brands to offer online gaming, Bodog Casino's sheer longevity has meant this milestone is far ahead of any company in the industry.

The lucky player who was dealt the billionth hand at Bodog Casino on Friday, March 4th at 19:17:23GMT now has a big choice to make: which billionaire's experience to pick, a holiday to Fiji's exclusive Turtle Island or a trip to the Monaco Grand Prix complete with trackside hospitality on a private boat.

"There are several gaming sites who have dealt a billion poker hands, Bodog included, but to have dealt a billion blackjack hands is a very special milestone for the Bodog brand," said Mark Leighton, Bodog.com's Casino Manager. "But most importantly it's thanks to the loyalty of our players that we have got this far and that cannot be stated enough."

Independent research shows Bodog to be the biggest online gaming brand in the world.