Aug. 28 (Bloomberg) -- Las Vegas Sands Corp., run by billionaire Sheldon Adelson, will today open the $1.8 billion- Venetian Macao resort, the latest chapter in casino operators' battle for a bigger slice of the world's biggest gambling hub.

The 3,000-room resort includes 1.2 million square-feet of exhibition convention space coupled with a giant shopping mall, an arena and a 1,800-seat theater. In both investment and size it will dwarf the 12 casinos built in Macau since Adelson opened the city's first foreign-owned casino in 2004.

``The scale and scope of the Venetian Macau is beyond anything that currently exists in Macau,'' Jonathan Galaviz, a partner at Globalysis Ltd., a Las Vegas-based gaming and leisure research company, said in an interview. ``Facilities that cater to the business traveler and convention center market clearly differentiates it from other facilities in Macau.''

Macau Chief Executive Edmund Ho ended billionaire Stanley Ho's 40-year monopoly of the city's gambling market by awarding licenses to other operators in 2002. Adelson, ranked sixth in Forbes magazine's list of the world's richest people this year, and competitors including Wynn Resort Ltd. and MGM Mirage are seeking to tap China's rising income to fuel Macau's gambling and tourism growth.

Venetian Macau, Asia'a biggest hotel, is the first casino built on the Cotai Strip, a plot of reclaimed land between the city's Coloane and Taipa Islands. That property will anchor a complex of hotels that will have more than 1 million square feet of gambling space, 3 million square feet of retail and nearly 20,000 hotel rooms. Adelson, 74, is investing as much as $11 billion on the strip.

`Something Spectacular'

``This is a big bet'' for Adelson, Billy Ng, a Hong Kong- based analyst at JP Morgan & Chase, said in a phone interview. ``There could be some missteps in the beginning, but we expect things to start moving up in about a year and when that happens we're in for something spectacular.''

Adelson, who plans to re-create the Las Vegas Strip on the 1.8 mile-Cotai Strip, is hoping the opening of Venetian can trigger a jump in the non-gambling portion of casino operators' revenue. Gambling income currently makes up about 95 percent of Macau operators' earnings, according to Ken Yeung, a Hong Kong-based analyst at BOCI Securities Ltd.

``In about a three-year period, we will replicate the critical mass of the middle of the Las Vegas Strip,'' Las Vegas Sands Chairman William Weidner told reporters on a conference call on Aug. 17. ``The Venetian represents the first step from being primarily a day-trip market to a fully-fledged, multi-day destination resort.''

Galaxy, Melco

Other casino operators scheduled to open large scale casino- resorts over the next 18 months near the Venetian include Galaxy Entertainment Group Ltd. and Melco-PBL Entertainment (Macau) Ltd.

Greenwich, Connecticut-based Silver Point Capital LLC and Hong Kong-listed ESun Holdings Ltd. last year announced they are investing HK$15 billion to build Macau Studio City, a 2,000-room hotel, casino, retail and entertainment complex opposite the Venetian that is scheduled to be completed by 2011.

``Even their competitors will want Venetian to succeed,'' said JP Morgan's Ng. ``That will prove Macau is not just about gambling and that the Las Vegas model of integrated-resorts would work there as well. In a way, they're all in the same boat.''

The key to the Venetian's success will be whether it can extend visitors' average length of stay, according to BOCI's Yeung.

Flying Time

Las Vegas Sands will seek to tap convention and exhibition participants to achieve its aim of increasing the average visitor stay to 3.6 days, said Weidner.

``Gambling revenue can't sustain these kinds of growth forever,'' Yeung said. ``You need to find reasons other than a nice casino to make people spend money there.''

In total, 2.2 billion people live within five hours' flying time of Macau, according to a report by CLSA Asia-Pacific Markets, compared with 410 million people in the same radius of Las Vegas.

``Macau will be a serious contender in the convention market,'' said Dan Londero, president for Greater China at Reed Exhibitions, which organizes events including the annual Global Gaming Expo in Las Vegas. ``The type of facilities the Venetian has is quite unique to the region.''

Adelson, who owns about 70 percent of the company, had a net worth of $26.5 billion as of the end of last year, according to Forbes.

Stock Doubles

Las Vegas Sands, the world's largest casino company by market value, has more than doubled its stock price since its initial share offering in December 2004, after the opening of the Sands Macau casino. The stock closed 3.9 percent lower in New York on Aug. 27 at $97.79 a share.

Gaming revenue in Macau, the only Chinese city where casinos are legal, started surging in 2004 after the government ended Ho's monopoly. The city's gaming revenue will likely increase 27 percent this year to $8.95 billion on China's economic growth and rising tourism, according to an April 26 Morgan Stanley research report. Macau last year overtook the Las Vegas Strip in revenue.

Second-quarter gambling revenue in Macau surged 50 percent to 19.57 billion patacas ($2.43 billion) fuelled by VIP gamblers. The increase came even after the government of China's Guangdong province in April began restricting visas allowing its residents to enter Macau.

To contact the reporter for this story: Kelvin Wong in Hong Kong at kwong40@bloomberg.net

Last Updated: August 27, 2007 20:32 EDT