All to play for Zach Coleman 'I had a dream one night,' casino mogul Sheldon Adelson told hundreds of analysts, journalists and investors gathered in Macau in March. "All of a sudden it came to me. There's room and demand to create Asia's Las Vegas.'' Macau, he said, was to become "the major conference and exhibition center for all of Asia.'' As waiters dressed in the costumes of medieval Venice sauntered by with champagne and canapes, the head man of Las Vegas Sands waited for the lights to dim before yanking away a shroud covering a three-meter-wide scale model of seven casino resorts, complete with lights. A dozen favored guests, presented as partners, sat on the stage with the septuagenarian billionaire who had cast himself in the role of creator. Two days before the speech, Adelson applied to United States regulators to trademark the phrases, "Asia's Las Vegas'' and "Cotai Strip,'' his company's name for the area shown on the model. In just three years, Adelson said, tens of millions of mainland Chinese would pour over the border for concerts, trade shows and, of course, gambling, on the Cotai Strip. Adelson and Las Vegas Sands spent three years negotiating with government officials, hoteliers and investors to reach this day but months later, Adelson's grand dream is fading. Dozens of cranes are in motion setting the foundations for the Venetian Macau resort that is to anchor the Cotai Strip but there is little to show for the other six resorts on Adelson's big model or the 13-18 others intended for subsequent phases. Adelson's dream team of investors who shared the stage with him aren't showing up and underestimated rivals are scoring surprise victories. No one is counting Adelson out, of course. From humble beginnings he has built 50 companies over six decades and is now worth close to US$12 billion (HK$93.6 billion). He hinted recently that his company may invest nearly US$1 billion more than previously estimated in the Cotai Strip. But his foes are well endowed too and bigger plans than his have come to naught on the shifting sands of Cotai since Macau's former Portuguese administrators started reclaiming land between Taipa and Coloane islands, which together give Cotai its name. Adelson's plan echoes a scheme advanced by Stanley Ho a decade ago that failed to win government support. "Macau is very small,'' says Antonio Jose Castanheira Lourenco, director of the Office of Infrastructure Development. "[Cotai] is the area where Macau can have big projects.'' Despite rapid reclamation, Macau is still the world's most densely populated place, with nearly three times as many people per square kilometer as Hong Kong. Cotai's 6.2 square kilometers will be the biggest addition yet, adding more than 25 percent to Macau's land mass - the equivalent of another Taipa Island. Lourenco has seen many Cotai visions since he arrived from Portugal in the early 1990s to take charge of a newly established agency overseeing the zone's development. Cotai was to be one of a number of bold projects left as a legacy at the close of three and a half centuries of Portuguese rule. Just over 10 years ago, the government published a master plan, envisaging a self-contained "new city," linked to the mainland by a bridge to Zhuhai and a train line to Guangzhou, where up to 450,000 inhabitants would live, work and play. But it was not to be. As the master plan was published, Macau's property market was entering a free fall that would last most of a decade. Momentum evaporated. Development proceeded on a small industrial park and the Lotus Bridge from Zhuhai and its attached immigration post. The government also widened the causeway that connects Coloane to Taipa through Cotai. But the train never came. With Cotai in limbo, Stanley Ho and his allies proposed a HK$23.4 billion China Macau World Trade Center to include 10 hotels, a huge exhibition center and a theme park. Entrepreneur David Chow backed a HK$6 billion plan called Mega City for a 2,000-room hotel, a golf course and combination indoor ski slope/artificial beach. Developer Victor Armando Fung proposed a HK$1.8 billion Convention and Exhibition Center with two hotels and conference halls. A fourth HK$1.5 billion proposal envisaged a marina, two hotels, a driving range and apartments.

Ho and Chow's grand plans went nowhere, but the two more modest proposals received official endorsement. The convention center still failed to take off. The real estate bust wasn't the only factor. Official attention shifted to what was then open gang warfare on the streets and the approaching handover to Chinese rule. Tourism was in a deep slump. Just before Macau's return to China in 1999 Cotai got its first hotel - the Pousada Marina Infante, complete with a Ho-run casino. An attached marina highlighted Cotai's new direction: sports. In 1997 Macau won the right to host the Fourth East Asian Games, to begin in September. This week, the government opened the East Asian Games Dome, the biggest project in its HK$2.7 billion Games construction program, in southeastern Cotai. Next door, work is nearing completion on the HK$232 million Macau International Shooting Range as well as tennis and bowling centers. Southwest Cotai is also home to a HK$23.1 million go-kart track built with government support, and a private golf course opening this year. Other sports fields are going up around the Macau University of Science and Technology, which opened in northeast Cotai in 2001. With private development otherwise stagnant, Hong Kong-listed eSun Holdings offered four years ago to open a HK$300 million television production center in Cotai called East Asia Satellite Television City by 2003. ESun dithered on development, missing its first target date, while meantime Macau ended Stanley Ho's gambling monopoly and solicited bids for new casinos. The government in early 2002 selected Galaxy Casino and Wynn Resorts to share the market with Ho's Sociedade de Jogos de Macau. The government bound each to invest billions of dollars in new resorts. Galaxy Casino had the most to deliver. Originally a group of Hong Kong and Macau businessmen led by Lui Che-woo of the K Wah Group, Galaxy won the government's favor with its last-minute pairing with Adelson, who appealed to officials because of his record at building Las Vegas into a world-leading trade show center. Only a few years before going to Macau, Adelson opened his first casino hotel, the Venetian, in which gondoliers serenade passengers on an indoor canal. Galaxy promised to invest HK$8.8 billion to build a 3,000-room Venetian and other properties in Macau. Cotai quickly emerged as the logical site, partly because of an official desire to steer casino development away from residential areas. For Adelson, the swampy plain was the promised land. At the March event, he said that after Chief Executive Edmund Ho discussed Cotai with him, ``it became clear this was an opportunity that had not been capitalized upon by anybody else.'' But just one resort might not be a big lure so Adelson turned his thoughts to assembling a cluster of six or seven. ``We need more critical mass,'' he told Business Week in 2002. Competitors would be frozen out, he told the magazine, ``because the land, all the [plots of land] will be taken.'' He said he would spend US$500 million-600 million to open the Venetian by 2005. The formula Adelson wants to transplant from the Venetian Las Vegas to Macau is to host a full calendar of trade shows to pack hotel rooms with expense-account travelers during the week, while using stage shows and other lures to tap the easier weekend leisure market. Both groups could be counted on to gamble their fair share at the tables. His first big stumbling block came when talks with the rest of the Galaxy group collapsed in late 2002. To keep him in the game, the government endorsed an arrangement whereby Las Vegas Sands became a subconcessionaire under Galaxy, with separate operations and obligations. Now the two groups would split the Cotai site, suddenly giving Adelson competition next door. He soldiered ahead, finding a ready audience among international hotel groups willing to manage resorts on Cotai - as long as someone else paid for construction. The Venetian broke ground the following month. The opening was pushed back to 2006, the latest allowed under the subconcession agreement. As the year went on, the budget skyrocketed to US$1.8 bn and the opening date slipped to the first quarter of 2007. Last month, a company filing with US regulators put the date back another quarter. The government could strip the company of the right to operate in Macau if it misses the deadline. Company officials say they expect to get an extension but have yet to receive one and Galaxy is contractually entitled to a say on whether it does. Adelson showed no sign of worry in March, casting the event as a celebration of success at sealing deals with hoteliers and investors for the six casino resorts that would join the Venetian Macau in Cotai. It sounded grand. William Weidner, Adelson's top lieutenant, told inter-viewers that the company would landscape the Strip with a mountain, a waterfall and decorative features related to the Eight Immortals of Chinese mythology. The Venetian Macau, he said, would have three canals to the Venetian Las Vegas' one. These gondoliers may yet sing, but the government seems increasingly keen to cancel the blank check Adelson thought Chief Executive Ho gave him for Cotai. Lourenco says two sites next to that of the Venetian Macau are now at Las Vegas Sands' disposal but the fate of four others must be negotiated between interested investors and the government. Las Vegas Sands has made inconsistent statements on whether it has received official approval for its master plan. Adelson's difficulty translating the good cheer displayed in March into definitive agreements with investors is eroding his position with officials in the face of demands from other casino operators for space to build. His competitors have bought his sales pitch more than his would-be partners. Naturally, Stanley Ho struck the biggest blow. Adelson said in March that Ho wouldn't be in Cotai. ``If I were him, I'd concentrate on protecting [existing] casinos,'' he said. But in May, Ho's son Lawrence unveiled a HK$8 billion plan for a resort featuring an underwater casino lapping over a plot on which Las Vegas Sands previously penciled in one of its resorts. To fill out the site, the government allocated to the Hos a plot that had been reserved for the University of Science and Technology. John Alexander, chief executive and managing director of Australian partner Publishing and Broadcasting Ltd, said: ``Clearly, Cotai is the largest & almost the last major open space in Macau.'' The elder Ho said in June he and his son would announce a second Cotai project this month. Though Adelson's former Galaxy partners have yet to break ground on their own Cotai resort, they are further along in grabbing land. Galaxy bought the aborted Convention and Exhibition Center project site next door and took a 10 percent stake in the tentatively named Grand Waldo Hotel project across the street. Construction on this hotel is well along and it will open with a Galaxy-run casino early next year. One plan under consideration for the Galaxy Cotai Mega Resort would create the world's largest casino and largest hotel, said Ken Gotfried, senior vice-president for gaming operations. ESun, after announcing late last year it had changed to a residential-focused development plan for its site, said in late May it would instead build three hotels and at least one casino. Chief executive Mark Lee estimated building costs at HK$3.7 billion. According to a Cotai area plan shown by Lourenco, about a quarter of the land remains uncommitted. His plan shows a third row of hotels along the lines of Cotai Strip Phase II, but he is noncommittal about whether any developers have been designated. Further east are four unpledged plots intended for tourism development. Next to the East Asian Games Dome a large site has been offered to a group planning a theme park and a hotel. South of the dome is a swathe of land still awaiting a plan. Odd as it may sound, nature is not being ignored, Lourenco says. An area between the Galaxy and eSun projects, along with the western edge of Cotai, is designated for the protection of mangroves and the black-faced spoonbill, an endangered bird species that uses Cotai as a seasonal roost. zach.coleman@singtaonewscorp.com