Looking at Macau, wondering if boom is over

Once upon a time, I spent some quality time with Las Vegas icon Bill Bennett. For those new to Las Vegas, he was “arguably the most successful gaming executive of the 1960s and 1970s.”

That’s how the Las Vegas Review-Journal’s A.D. Hopkins described him, anyway.

And I think that pegs him about right, given that Bennett parlayed ownership in a small slots “grind joint” into a publicly traded casino giant and started a love affair between Wall Street and the Strip.

Now, let me clarify what I mean by “quality” time: I met Mr. Bennett because he was angry about the coverage he thought he was getting from the Las Vegas Review-Journal.

I went to his place. The meeting started at a large conference table. Mr. Bennett sat at the head; I sat to his left. The rest of the table was filled with his casino executives, most of them down table, as far out of the range of fire as they could get.

With no ceremony, Mr. Bennett pulled out a large stack of newspaper clippings. He’d finish reading one, pass the clip to me, and then read the next.

Sitting at a table with a legend like Bennett — the members of his inner circle nodding their heads at each picayune perceived slight voiced about my newspaper’s coverage — was a surreal experience.

The word “erratic” passed through my head a few times, but not over my lips. I soon discovered that listening to mercurial Las Vegas characters (Sheldon Adelson and Steve Wynn come to mind) was to be part of my job.

Anyway, after Mr. Bennett got everything off his chest, we moved on as if the past 30 minutes hadn’t happened.

Boom, the stack was done. Session over.

Suddenly, he was constructive about how the newspaper and how I, as a young newspaper publisher, might help cover the advent of Las Vegas’ publicly traded companies better. His executive team members began excusing themselves to other duties.

Eventually, I was in the room alone with Bill Bennett and that big stack of marked-up news clippings. So I took advantage.

We were in the early stages of the megacasino growth explosion then. And I, as a journalist making the transition to the business side of the profession, wanted to know how long he thought it would last.

Watch capital expenditures, he said. As long as casinos spend money in Las Vegas, the party’s on. When that money flows to other places, the party’s over.

It turned out to be good advice. When capital started to flow out of Las Vegas and into Macau at the turn of the century, the boom in Las Vegas slowed. In 2007, Macau revenue eclipsed Las Vegas revenue.

Macau is not an entirely a bad thing for Las Vegas. It gave the smarter casinos a place to hedge their bets through the worst of the Obama/Bush depression.

Today, the Las Vegas economy is beginning to firm up. But in Macau, there’s reason to worry. For as marvelous as that place has been for casinos tapping into the huge Asian market, there’s one big elephant in the room: China is still a communist country.

While Hong Kong and Macau agitate for democratic reform — a worker strike in Macau last spring and massive civil unrest in Hong Kong today — Beijing is never going to grant them real democracy.

New Yorker magazine’s Evan Osnos explained why last week.

In a speech to the Communist Party, China’s leader, President Xi Jinping, said, “Why did the Soviet Communist Party collapse? An important reason was that its ideal and convictions wavered.”

When people began to complain about Internet censorship and air pollution, Xi simply arrested lawyers, activists and journalists, warning party leaders of “unmentionable” topics.

Among the off-limits topics, Osnos writes, are Western-style democracy, pro-market liberalism, a free press and “nihilist” criticism of party history.

That’s not a man willing to share power. That’s not a guy who gives a rip about the value of Macau casino stocks, which have lost 20 to 30 percent of their value so far this year.

We can never know, of course. But, I wonder what Bill Bennett might say about Macau right about now.

Is that party winding down?

Sherman Frederick, former publisher of the Las Vegas Review-Journal and member of the Nevada Newspaper Hall of Fame, writes a column for Stephens Media. Read his blog at www.reviewjournal.com/columns-blogs/sherman-frederick.