Macau aims for another Vegas staple: boxing

Macau, which long ago eclipsed Vegas as the world’s top gambling city, is looking to add to its allure by holding the kind of boxing bouts for which Las Vegas is known.

The tiny Chinese enclave near Hong Kong is hosting a series of high-profile bouts this year featuring a pair of Asian stars: Chinese two-time Olympic gold medalist Zou Shiming and Philippine fighter Manny Pacquiao.

Zou made his professional debut in April, winning the “Fists of Gold” match at Macau’s Venetian resort. He returned for a second installment of the series on Saturday night, defeating his Mexican opponent in a unanimous decision at the Cotai Arena.

Zou’s rise has helped boost boxing’s popularity among fans in China, where the sport was banned until the mid-1980s. Chinese fans, mostly subdued for the six preliminary “undercard” fights, rose to their feet for the main event, calling out “Jia you!” – Chinese for “Let’s go!” – and stomping their feet as Zou fought a six-round flyweight match with Jesus Ortega.

Now all eyes are on the “Clash in Cotai” in November, featuring Pacquiao for the main event and Zou on the undercard. Organizers say it’ll be the biggest professional boxing match ever held in China. It’ll also be the first outside of the U.S. since 2006 for the Filipino superstar, who has lost his two last bouts.

Boxing’s emergence in Macau is another reminder of how the global gambling industry’s center of gravity has shifted to the East thanks to rising incomes in China. The former Portuguese colony, now a semiautonomous region of China, overtook the Las Vegas Strip in 2006 as the world’s most lucrative gambling market. Last year it raked in $38 billion in gambling revenue, six times more than the Strip. But authorities want Macau to be known for more than gambling and see big events as a way to turn the city, which has a lingering reputation for seediness and corruption, into a broader tourist destination.

Zou’s celebrated trainer, Los Angeles-based Freddie Roach, left no doubt about how the focus has changed in the boxing world.

“I think I’ve got a new home,” he said at a news conference last week, referring to the Venetian, the flagship casino resort of billionaire Sheldon Adelson’s Macau casino arm, Sands China Ltd. “Macau has become the capital of the boxing world.”

For promoter Top Rank, it’s a chance to get a head start on bringing the sport to the huge, untapped market in China. Boxing was banned under Communist Party Chairman Mao Zedong for being too violent and too Western. It wasn’t until 1986 that the ban was lifted.

The sport is nowhere near as popular in China as soccer or basketball, but Top Rank boss Bob Arum sees a vast potential market of new fans. Key to his plan is Zou, who became a celebrity in China after winning a gold medal in the Beijing Olympics and another at the London Olympics.

Zou “has energized people who follow sports in China,” said Arum. “The number of people who watched his last fight in China was quite remarkable, anywhere between 100 million to 200 million homes based on the surveys we’ve had done. That’s outstanding. Most countries don’t even have that many people.”

Top Rank put on a Vegas-style production for the Macau fights, complete with spotlights, scantily-clad “ring girls” and announcer Michael Buffer, best known for his catchphrase, “Let’s get ready to rumble!” Arum said production costs for a Macau show amount to $500,000, about the same as for bouts in Vegas.

Arum said he envisions Top Rank, which organizes 60 boxing shows a year, eventually holding four to six a year in Macau. Las Vegas, in comparison, is hosting a dozen pro bouts this year.

For Arum, the big prize in bringing boxing to China is the potential for pay-per-view profits that would dwarf those in the U.S.

Zou’s fights were carried on state broadcaster CCTV. Arum had hoped to offer the Pacquiao fight on pay per view but he said lining up a deal with potential partners has been harder than expected. China’s broadcasting industry is dominated by state-run broadcasters while premium cable and satellite channels have little role to play.

One idea had been to offer the November fight for $5 in China on smartphones. That’s a fraction of the $50-$60 typically charged to see a live bout on cable in the U.S but the sheer numbers of potential viewers in a country with more than 1 billion people would make up the difference.

“We were hoping to do pay per view in China but we are not anywhere near ready to do it yet. That’s something for next year and the year after,” he said.

“Once we get that going, it could be a monster,” said Arum.

Even if Chinese pay per view doesn’t take off, Macau will still remain a viable boxing venue because for non-American fighters it will represent a bigger purse. They won’t have to pay U.S. taxes of about 40 percent on their earnings.

That would be a substantial incentive for someone such as Pacquiao, who would only be subject to lower tax rates in the Philippines or Macau on the $25-$30 million that Arum said he’s expected to earn from the November fight.

The biggest upside from the fight nights, however, may be for the casino. It benefits directly from more visitors, which will help raise gambling revenue. The Pacquiao fight will be an especially good chance to reel in the high-rolling mainland Chinese VIP gamblers that have supercharged Macau’s casino industry.

It also gives casinos another way to circumvent the advertising and promotional restrictions that come with mainland China’s ban on casinos.

“The boxing in Macau without doubt helps promote Sands China or the Venetian brand in China,” said Aaron Fischer, head of gaming research at brokerage CLSA Asia-Pacific Markets. “Marketing of casinos is illegal in China and hence gaming companies will have to indirectly promote the integrated resort by marketing the non-gaming facilities like the hotel, conventions or by marketing the various events like boxing matches.”