Cultural divides can become graveyards for the ideas of companies maneuvering their way through complex deals involving governments and their demands.
The price of brick and mortar may be nothing next to the challenges provided by bureaucrats who do not know how much they don’t know about the gaming and entertainment business.
But if the potential profit is big enough the companies keep pushing forward.
That’s the experience of Las Vegas-based companies preparing for the opening of their multi-billion-dollar resorts in Macau by early next year.
The resorts the Chinese subsidiaries of Wynn, MGM and Las Vegas Sands are building will be complete in the near future. Coming to terms with Chinese authorities about rules and procedures may be another matter.
Yes, putting the bricks and mortar in place may have been among the simplest of tasks next to the need to deal with paranoia about the level of western influence.
That’s why the struggles of the giant Disney company to get its $5.5 billion Shanghai Disney Resort open last week have probably been getting careful study from the Chinese subsidiaries of Vegas companies that long ago became accustomed to having their way in Southern Nevada. The Disney experience was summarized in a recent New York Times story that suggests the opening of Disney’s Magic Kingdom in one of China’s major cities came close to not happening.
The Shanghai park, which opened on Thursday, has become “mission critical for Disney.” It is designed to be a machine in China for the Disney brand, with a manicured Magic Kingdom-style park, “Toy Story”-themed hotel and Mickey Avenue shopping arcade. More than 330 million people live within a three-hour drive or train ride, and Disney is bent on turning them into lifelong consumers.
That’s the thinking in Macau where the six companies investing billions in new casinos find themselves within easy reach of affluent mainland markets that surpass anything available elsewhere. All they have to do is pick their way through marketing challenges provided by the central government’s tendency to change the rules of the game in mid-stream.
The Times notes, “Disney is sharing the keys to the Magic Kingdom with the Communist Party. While that partnership has made it easier to get things done in China, it has also given the government influence over everything from the price of admission to the types of rides at the park.”
This is where I can imagine heavy sighs coming from Las Vegas executives as they mumble, “tell me about it,” or words to that effect.
The Times story continues, “From the outset, Disney has catered to Chinese officials, who had to approve the park’s roster of rides and who were especially keen to have a large-scale park that would appeal to adults as well as children. The Shanghai resort, which will ultimately be four times as big as Disneyland, has a supersize castle, a longer parade than any of the other five Disney resorts and a vast central garden aimed at older visitors.”
All kinds of compromising is to be expected when a company is, like the three from Las Vegas, looking for good locations with easy access to customers numbering in the tens of millions.
Phil Hevener has been writing about the Nevada gaming business for more than 30 years. Email: