op diva Mariah Carey, film stars Leonardo DiCaprio and Robert De Niro and director Martin Scorsese are among the celebrities enlisted to help launch Melco Crown Entertainment Ltd.’s $3.2 billion Studio City project in Macau.
The movie-themed resort features a Batman flight simulator ride, a figure-8 Ferris wheel and Art Deco architecture evoking Hollywood’s early days.
It’s part of a wave of big-budget projects opening over the next two years. They were conceived at a time when a seemingly endless wave of money from wealthy mainland Chinese gamblers was flooding into the former Portuguese colony, turning it into the world’s biggest gambling market.
Now, the special Chinese region finds the odds have quickly turned against it. Mainland Chinese high rollers are staying away amid a persistent economic slowdown and President Xi Jinping’s continuing crackdown on corruption, both of which are crimping lavish spending. The downturn has cut into profits at U.S. casino operators such as Las Vegas Sands Corp. and Wynn Resorts Ltd., which have multibillion-dollar projects in the pipeline.
“With the anti-corruption campaign and the political sentiment, a lot of wealthy people feel going to Macau is very risky. They don’t want to be seen on the radar screen,” said Tony Tong, founder of Pacific Financial Services, a consulting firm that advises Asian casinos and junket companies.
Macau, an hour by ferry from Hong Kong, is the only place in China where casinos are legal. It has about three dozen casinos that rake in about seven times more revenue than the Las Vegas Strip.
Tong said wealthy mainland Chinese high rollers feel they’ve been to Macau “too many times” and are now eyeing other emerging Asian gambling destinations such as Vietnam, Cambodia, the Philippines, South Korea and Vladivostok in Russia’s Far East.
Melco Co-Chairman Lawrence Ho said all of the new casino’s gambling tables will be given over to so-called mass market players, with none for high-roller VIPs. The decision underlines its strategy of targeting China’s rising middle class consumers, who are expected to take over as the main driver of Macau’s growth.
“This is the future of China,” Ho told reporters at the launch. “The rise of the middle income earning bracket and the rise of the more sophisticated well-travelled customer.”