Tue, Feb 19, 2013 - Page 15 News List

Casino investors eyeing Hainan as next stop

Reuters, SANYA, China

Chinese art, film and real estate mogul Zhang Baoquan poses at the newly opened Mangrove Tree Resort World on Sanya Bay in Hainan, China, on Feb. 6.

Photo: Reuters

Placing bets on green-felt baccarat tables in a new casino bar on China’s southern Hainan island, punters seem oblivious to a huge wager quietly being placed around them, one that could potentially siphon business from the world’s largest gaming hub in Macau an hour’s flight away.

For now, players at Jesters casino bar, part of the newly opened Mangrove Tree Resort World on Sanya Bay, cannot win cash — only points that they can use to pay for accommodation, luxury goods, jewelry and artwork for sale at the resort.

Owned by art, film and real estate mogul Zhang Baoquan (張寶全), the casino bar marks the Chinese government’s first tacit approval of a gaming concept outside of Macau. Global investors, including some of the world’s biggest gaming companies, are watching to see how the chips will fall.

“Our casino bar is the first in the country. The government is monitoring; it’s a test,” Zhang said in a recent interview at his 23rd-floor office overlooking his sprawling 70-hectare property that opened late last year.

“Right now we are not at this stage [legalizing casino gambling], but my personal opinion is, in future, there is a big possibility that they will have,” he said.

The stakes are enormous — China’s monopoly gambling site, Macau, raked in US$38 billion in gaming revenues last year, primarily from Chinese gamblers. If Beijing were to allow gambling elsewhere in the country, cash would follow.

It is not just the Chinese government that is watching the development. MGM Resorts International opened a hotel in Sanya last year and fellow US casino operator Caesars Entertainment is set to open a hotel next year.

An MGM spokesman said the company had no plan to introduce “anything of this kind.” Caesars did not respond to requests for comment.

Dressed in jeans and a black-and-white Hawaiian shirt during his interview, the 56-year-old Zhang said he aims to create an integrated resort similar to those in Las Vegas and Singapore where gaming, convention space and retail outlets are offered together.

Mangrove Tree Resort World, the newest addition to Hainan’s rapidly developing hotel scene, will be China’s biggest resort when construction is completed next year. It will have more than 4,000 rooms, a convention hall accommodating 6,000 people and facilities including a water park.

It is one of 10 integrated resorts that Zhang is developing around the country, including one more in Sanya and others stretching from Lhasa in Tibet to the eastern coastal city Qingdao.

While the Chinese government does not permit casinos in the country outside of Macau, Zhang — ranked by Forbes as one of the country’s 300 richest people last year with US$600 million — said Hainan could become an exception.

Sensitive to existing restrictions, the soft-spoken businessman emphasized cultural attractions such as his art gallery that, along with the casino bar, will be incorporated into the planned resorts.

Inside Jesters, which models itself on Macau’s casino halls with garish chandeliers and a giant roulette wheel ceiling, players buy tickets costing 500 yuan (US$80) each. Bets range from 20 yuan to 2,000 yuan in the mass area, while the high-limits area is set at 2,000 yuan to 100,000 yuan. Big whale punters will be able to bet more than 100,000 yuan once the VIP room opens on the second floor.

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