Introducing China’s First Casino With Non-Cash Winnings
Feb. 18 – A subtle shift has emerged in how China’s central government views gambling on the mainland, with the quiet opening of the Jesters casino bar, part of the Mangrove Tree Sanya Bay Resort World complex in Sanya, Hainan Island. In a concept that has the traditional casino operators watching from the sidelines, winnings at Jesters are paid not in cash, but instead through credits for accommodation, luxury goods, artwork and jewelry offered for sale by stores within the resort. The Jesters concept is owned by Chinese real estate developer Zhang Baoquan, and marks a departure from the traditional manner of cashing in and out gaming chips. It also represents Beijing’s first explicit approval of a casino-style operation on its territory external from Macao.
Jesters has been granted permission to operate as a pilot test case, with legislation legalizing casino operations in Mainland China still some way off. However, the prospect of luring Chinese customers has made the larger resort operators such as Caesars and MGM – both of which are opening hotels in Sanya in 2014 – take note. The stakes, should the pilot be successful, are huge. Macao turned over a staggering US$38 billion last year in gambling revenues, with most of that amount coming from Mainland Chinese punters. The Macau Venetian alone overtook the Venetian Casino in Las Vegas, and the entire actual city of Venice in terms of annual revenues, way back in 2007.
The Mangrove Tree Resort, when fully completed next year, will be China’s largest resort, covering some 173 acres, comprising over 4,000 rooms, a 6,000-seat conference center and other facilities including a water park. Zhang himself is developing a further nine resorts across China, including similar plans scheduled for Qingdao and Lhasa, depending upon government approval.
Jesters will be based upon the nouveau riche tackiness of Macau’s garish gaming palaces, with huge chandeliers, a ceiling shaped as a roulette wheel and gilt glittering everywhere. Players will enter through purchasing tickets priced at RMB500, with bets ranging from RMB20 to RMB2,000. High rollers will have single bets capped at RMB100,000 until a VIP room is opened a year after operations successfully commence.
Jesters itself is already open – but only to hotel guests – and possesses some 50 tables at this stage. Products available for redemption include iPads, Rimowa suitcases and artwork from Zhang’s own art gallery in Beijing. Retail stores such as Prada and Louis Vuitton are part of an additional 20 premium outlets that will open in 2014. The resort has been 70 percent funded by the China Development Bank.
Hainan is being increasingly developed as a center for “international tourism” with the central government having approved a further 15 resorts and 63 five-star hotels as part of the island’s existing Five-Year Plan.
Dezan Shira & Associates is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in emerging Asia.
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