It’s likely that Macau will join Las Vegas in dispelling the conventional wisdom that gambling is a recession-proof business. Efforts to change things are brewing. The planned Vegasization of Macau can be seen in the ambitions of Adelson’s Las Vegas Sands.

A year ago, few quibbled with Macau bulls such as Steve Wynn, Sheldon Adelson and, long before the Vegas tycoons showed up, Stanley Ho Hung-sun. Given Macau’s proximity to a nation of 1.3 billion potential gambling enthusiasts, it’s still hard to bet against the former Portuguese colony.

Yet some important changes are afoot, including the global economic environment. The United States is on the verge of a recession and China is bracing for a marked slowdown in its economy. Weakening growth is hurting stock markets and also showing that Vegas isn’t immune to macroeconomics after all.

Adelson was the biggest loser in this year’s Forbes ranking. The Las Vegas Sands CEO fell to 15th place from third after casino stocks tumbled. Besides, Vegas Strip casino gambling revenue dropped for the seventh straight month in July as cash-strapped US consumers curbed entertainment and travel spending. Revenue declined 15 percent in July alone.

A variable that may change is the flow of mainlanders to Macau. Shares of Las Vegas Sands, Wynn Resorts, MGM Mirage and Melco Crown Entertainment dropped in August on news that China may increase travel restrictions to what’s now the world’s biggest gambling center. Macau’s casino gambling revenue rose 55 in the first six months of 2008, accelerating from 47 growth in 2007.

Will Macau suffer Lehman’s fate – a place oozing confidence a year ago that has now gone bust? It’s doubtful, yet the risks suddenly facing Macau tell a few bigger stories. One is how the ripple effects of the US credit crisis are traveling far and wide. Another is the hubris with which analysts argued that Asia had decoupled from the United States. Perhaps the most important is the Asia-wide risk of relying so heavily on China, which is itself a developing nation.

The plunge in Chinese shares speaks to the danger of developing economies depending on another emerging one. Macau relies on so-called VIP gamblers. The drop in stocks may mean fewer high- rollers will come Macau’s way.

Macau returned to mainland rule in 1999, and its torrid early growth is being followed by a slowdown in expansion efforts. One might argue Macau is merely taking a much-needed breather. Its casinos have more than doubled to 30 since the government ended billionaire Ho’s 40-year monopoly in 2002 and awarded licenses to five other operators.

Lawrence Ho Yau- lung, Stanley Ho’s son and one of Melco Crown Entertainment’s two chairmen, pointed out that the only place in China where casinos are legal still lacks the airport and ferry capacity to support its growth. „Macau is just taking a deep breath at the moment – nothing more,“ Ho says.

Efforts to change things are certainly brewing. The planned Vegasization of Macau can be seen in the ambitions of Adelson’s Las Vegas Sands, with almost a fifth of Macau’s casino market. Adelson plans to invest USD 12 billion in the project. The odds are in Macau’s favor. The effects of a bust on Wall Street make it a riskier bet.