Venetian Macau Paces Enclave's Transformation

A major transition is under way in Macau, and last month's opening of the new Venetian resort in the Chinese enclave is likely to be recognized as the turning point.

When the giant resort opened its doors, it signaled the beginning of a change from Macau's status as a day-trip destination reliant on big-betting baccarat players.

Instead, Macau is becoming a more diverse destination resort that could someday join Las Vegas as a place that makes more money from an array of hotel rooms, retail, dining and entertainment than from its casinos.

"With the opening of the Venetian Macau, the upcoming Wynn (Macau) expansion and the opening of the MGM (Macau), the market is morphing in the direction of nongaming," said Deutsche Bank Securities gaming analyst Bill Lerner.

Lerner, who recently returned from his second Macau trip in two months, said he expects nongaming amenities to supply more than 20 percent of the revenue generated at Macau resorts in the next five years.

It's no surprise that Las Vegas companies are leading that charge, since more than 60 percent of revenue generated in Southern Nevada's top resorts comes from sources outside of the casino.