I wasn't legally able to enjoy the Las Vegas Strip 20 years ago, but I've followed the changes from afar, and the transformation has been nothing but breathtaking. In 1990, Steve Wynn had just opened the Mirage, a huge gamble on Las Vegas' future and the birthplace of the Strip's megaresort. The Excalibur would open later in the year, but the Bellagio, MGM Grand (in its current form) and Venetian were still years from becoming a reality.
So what will the new hub of gambling, Macau, look like in 20 years? Right now, Macau is a few years ahead of how The Strip was 20 years ago but still in a building boom like we haven't seen since the 1990s in Las Vegas.
The new Strip
The Cotai Strip will be more like a Cotai Loop, containing some of the most profitable casinos in the world. Sitting in the middle of this loop will lie Melco Crown's
How big will Macau be?
The biggest question is knowing how big Macau's gambling market will be by then. Macau casinos brought in $23.5 billion in 2010, growing 58% from 2009. That kind of growth is obviously unsustainable (would lead to $221 trillion in gambling revenue in 20 years), but growing to $200 billion or $300 billion certainly isn't out of the question. The limit may be China's willingness to spend an increasing portion of its GDP on gambling. It is estimated that China's GDP was $5.7 trillion in 2010, and even with a high national growth rate, a $300 billion gambling market would be a decent percentage of GDP -- something that could be worrisome.
Unless Stanley Ho lives to be 109, some sort of succession plan will play out for his stable of casinos in the next 20 years. With a wife and 17 children fighting for control, I think it is likely that pieces of the empire will be broken up and some will be sold. Competitors will swoop in to buy valuable land and tear down the properties for newer casinos. This could give us another Strip on the Macau Peninsula, stretching from Wynn Macau to the Ferry Terminal.
I see Melco Crown as the big buyer of properties. The company is controlled by Ho's son and will have the capital to expand beyond its small stable of casinos. In 20 years, I see Melco running six Macau casinos and taking a more prominent role in the area. With the cash that Las Vegas Sands is making, a few acquisitions will likely be in store there, as well.
How big do you think Macau's gaming market will be in 20 years? Leave your predictions in the comments section below.
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