Property tycoon Zhang Baoquan gambles on cashless casino

Placing bets on green-felt baccarat tables in a new casino bar on Hainan Island , punters are oblivious to a huge wager quietly happening around them that could siphon business from the world's largest gaming hub in Macau, an hour's flight away.

For now, players at Jesters casino bar, part of the new Mangrove Tree Resort World on Sanya Bay, cannot win cash - only points to pay for accommodation, luxury goods, jewellery and artwork at the resort.

Owned by art, film and property mogul Zhang Baoquan, the casino bar marks Beijing's first tacit approval of a gaming concept outside Macau. Global investors, including some of the world's biggest gaming companies, are watching to see how the chips will fall.

"Our casino bar is the first in the country. It's a test," Zhang said. "We are not at the stage of legalising casino gambling, but I believe there is a big possibility that they will."

Macau, the country's monopoly gambling enclave, raked in US$38 billion in gaming revenues last year, primarily from Chinese gamblers. If Beijing were to allow gambling elsewhere in the country, cash would follow.

It's not just the government that is watching developments. MGM Resorts International opened a hotel in Sanya last year, and fellow US casino operator Caesars Entertainment is set to open a hotel next year.

An MGM spokesman said the company had no plan to introduce "anything of this kind". Caesars did not respond to requests for comment.

Zhang said he aimed to create an integrated resort similar to those in Las Vegas and Singapore where gaming, convention space and retail outlets were offered.

Mangrove Tree Resort World, which opened late last year, is the newest addition to Hainan's rapidly developing hotel scene and will be China's biggest resort when construction is completed next year.

It will have more than 4,000 rooms, a convention hall accommodating 6,000 people and a water park. It is one of 10 integrated resorts Zhang is developing around the country, including another in Sanya and others stretching from Lhasa in Tibet to Qingdao in Shandong .

While Beijing does not permit casinos outside Macau, Zhang - ranked by Forbes as one of the country's 300 richest people with US$600 million - said Hainan could become an exception.

Inside Jesters, which models itself on Macau's casino halls, with garish chandeliers and a giant roulette wheel ceiling, players buy tickets costing 500 yuan (HK$620). Bets range from 20 yuan to 2,000 yuan in the mass area, while the high-limits area is set at 2,000-100,000 yuan. Big-whale punters will be able to bet more than 100,000 yuan once the VIP room opens on the second floor.

The casino bar, with 50 gaming tables, is at present open only to hotel guests, but when the resort is completed, local residents will be allowed in.

When players win, they receive "Mangrove" points that can be used to buy products available in the casino, such as an iPad 3G or a Rimowa suitcase. Once luxury brands open outlets within the resort, customers will be able to spend their points in those stores. Art work from Zhang's Beijing art gallery is also available.

Zhang, president of Beijing conglomerate Antaeus, has the financial backing of China Development Bank. The state lender financed 70 per cent of the cost of the Mangrove Tree expansion.

China is positioning Hainan as an international tourist destination, approving the construction of 15 resorts and 63 five-star hotels as part of its five-year plan.

Meanwhile, Zhang is pushing ahead with his plans. Aiming to list Mangrove Tree on the Hong Kong stock exchange in 2015, he hopes to use the capital raised to take the brand outside China.

"Sydney, the Maldives, the United States, England, Paris and Turkey" would all be good, he said with a shy smile.