[top photo: Fireworks mark the opening of City of Dreams in Macau, China.]
By Guy Newey
MACAU (AFP) - The latest giant Macau casino complex, City of Dreams, opened its doors Monday, a high-stakes test of whether a reclaimed swamp in the gaming haven can avoid sinking into obscurity.
Backed by scions of two gaming dynasties, the 2.4 billion US dollar (S$3.5 billion) complex will eventually offer more than 500 casino tables and 1,500 gaming machines, as well as top-end restaurants, shops, hotels and a lavish entertainment venue. The grand opening was marked by a huge fireworks display, while hundreds of punters queued to try their luck at the new tables.
City of Dreams will be the only casino to open in the former Portuguese colony in 2009 after six years of frantic construction.
It is being seen as a barometer of whether the reclaimed Cotai Strip can emulate its more famous relation in Las Vegas.
"With more quality attractions... and more diverse entertainment, I think gone are the days where our visitors are purely here for gambling," said Lawrence Ho, one of the backers of the new project and son of Macau's original gaming tycoon, Stanley.
City of Dreams is owned by Melco Crown Entertainment, a joint venture between Lawrence Ho and James Packer, son of the late Australian media and gambling magnate, Kerry.
The two joined together Monday for a guitar-smashing ceremony to mark the opening of the complex's Hard Rock Hotel.
Macau already takes in more gaming dollars than Las Vegas and Atlantic City combined on the back of a rush of deep-pocketed Chinese gamblers.
But worries over money laundering, corruption and unease about Chinese cash being vacuumed up by foreign operators led mainland authorities last year to stem the flow of visitors.
Gaming revenues dropped sharply, along with the share prices of the six companies with licences to operate casinos in Macau.
The slowdown cast doubt on the future development of the Cotai Strip, which is positioned away from the city centre and is key to Macau's efforts to become an all-round tourism destination.
A gleaming Cotai project by US firm Las Vegas Sands was halted late last year with the loss of more than 11,000 jobs, and the firm is still struggling for finance to complete the complex.
Sands already owns two casinos in the city including the world's largest by area, the Venetian, which sits opposite the new City of Dreams, and will be watching closely to see how its new neighbour fares.
The Venetian was the first completed development on Cotai and its mix of high-end dining and world-class conference facilities, alongside hundreds of gaming tables, was seen as a pioneer in Macau's growth.
City of Dreams is also hoping to help the city of 546,000 become a more rounded destination.
Upmarket resorts like the Hard Rock Hotel, stuffed with memorabilia from music legends such as Bob Dylan and Elvis Presley, sit alongside attractions such as "The Bubble," a domed multimedia theatre.
Gabriel Chan, a Macau analyst with Credit Suisse, said if City of Dreams met expectations in the first few months without damaging the Venetian's market share, it will help re-energise the Cotai Strip.
"On the other hand, if City of Dreams does meet expectations by cannibalising its competitors, we believe (Sands) will face the most pressure," he said in a recent research note.
Ho took a swipe at his rival's precarious financial position.
"Unlike some of our competitors who have very stretched balance sheets, we are truly an Asian company so we have always managed our balance sheet very carefully," he told reporters ahead of the opening.
Jonathan Galaviz, an analyst with Las Vegas-based consultancy Globalysis, said the opening provided a positive sign.
"At a time when many are questioning whether Macau is still viable for new development, I think this project launch answers that question," he told AFP. Macau showed tentative signs of recovery in the first quarter, but gaming revenues were still down 12.8 percent compared with the first quarter of 2008, and high-roller gaming, the lifeblood of the city's growth, continues to struggle.