The Vegas of the East

Macau, a former Portugese colony in southern China, is setting itself up to one day overtake Vegas as the gambling capital of the world.

From Forbes:

Photo from macau.a2zcasino.eu

HONG KONG/LOS ANGELES, May 26 (Reuters) - The world economy may be slumping, but don't tell that to Macau -- the former Portugese colony which is set to trump Las Vegas heading out of the worst global downturn since the Great Depression.

In the smoke-filled gambling halls of Macau's MGM Mirage casino, hundreds of Chinese gamblers were crammed around tables flipping cards, playing roulette and rolling dice on a recent day, seemingly unaffected by the slowdown.

The ace up the sleeve of Macau, the world's biggest gambling market, is this steady influx of risk-loving Chinese flocking to the only place in China where casinos are legal. Las Vegas, on the other hand, is saddled with a stagnant U.S. economy and glut of new casinos preparing to enter the market.

"We've seen better-than-expected performance in the overall gaming market of Macau," said Credit Suisse ( CS - news - people ) analyst Gabriel Chan. "Vegas is still suffering and will take a longer time to recover, but in Macau, we are beginning to see the light at the end of the tunnel."

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One of the most amazing stats I've heard about Macau is this: there are approximately 3.1 billion people within a five hour flight of Macau. That is incredible. Talk about a primo location.

In the past several years, Vegas' image has been revived. People of my generation have really lionized the place. I'm a little bit confused by this actually. My home city, Kansas City, has a number of casinos. I've never been to Vegas and I'm not completely aware of everything it has to offer, but this kind of competition has to hurt the place. Kansas City is no Vegas, I know that. But there are a wide selection of places one can choose from if he or she wishes to go gambling in Kansas City. For this reason, it's not surprising to me Vegas is being hit hard during the current downturn.

The fact that gambling is illegal in China is going to be great for Macau. That, combined with China's rise, and Macau's close proximity to the masses of Asia is going to make Macau a Mecca of gambling going forward.