L ast summer, the Grand Emperor Hotel was poised for big things. Jackie Chan and casino mega- mogul Stanley Ho had joined Albert Yeung, Hong Kong's leading music impresario, to invest in the HK$1.5 billion project. The prospect of adding Chan's celebrity star power to the project promised to make this casino hotel stand out in Macau's increasingly crowded market.

But the Grand Emperor's planned September opening date passed by. Police swept through the construction site twice, rounding up illegal laborers. Fires broke out twice in three weeks. New opening dates came and went.

For Macau, high expectations built on 2004's explosive casino growth have ground to earth. The annual take for the enclave's casinos is almost certain to fall short of widely hyped projections that they would surpass those of the Las Vegas Strip.

Similarly heated forecasts that the territory would welcome 20 million visitors are proving off the mark, despite Macau hosting the East Asian Games and the addition of Macau to the UNESCO World Heritage list.

Economic growth has slowed to levels not seen since SARS grounded Asian travel. Inflation is higher than it has been in a decade.

Shares of most Hong Kong and United States listed companies linked to Macau gambling are ending the year far below where they started and traders are looking at a new play - companies investing in China's domestic lottery industry.

About 10 listed companies have shelved or backed out of casino-related investments in Macau. After presenting eight companies to the public in March as his partners for developing casino resorts in the Cotai reclamation area, Las Vegas Sands chairman Sheldon Adelson failed to seal a deal with any of them.

Not that it's that bad. Most places would be very satisfied with Macau's 2005. The SAR received almost two million more visitors in the first 11 months of the year compared with the same period of 2004. Economic growth for the first three quarters rose 5.2 percent. Unemployment hovered at an eight-year low. Casino revenues for the year to October were up 12.6 percent, giving the government a fat budget surplus which allowed for tax cuts and hikes in public spending.

The grumbles stem from hyped expectations that outran reality. Massive change is under way in the territory but it takes time to manifest itself.

"While growth rates may be disappointing, we continue to maintain that 2005 growth is not indicative of the future of the Macau market and is essentially immaterial," wrote Deutsche Bank gambling sector analyst Marc Falcone.

A key element in the 2004 boom was the opening of the Sands Macau casino, a US-style showplace dramatically different from any other in town. As the first authentic Las Vegas casino in Asia, the Sands lured tens of thousands of players and kept them coming back with its emphasis on service and facilities.

The Sands was one of five casinos that opened last year. This year, by contrast, the only new casino after the Golden Dragon's debut in January was a small parlor in the Hotel Fortuna in March.

Falcone is among those expecting more excitement in 2006. The Grand Emperor has reset its opening for next month. Galaxy Casino, owned by Hong Kong's Galaxy Entertainment Group, will open its second and third casinos in the early part of the year, both mid- size parlors in new hotels.

Around September, Las Vegas gambling mogul Steve Wynn is to open the US$1.1 billion Wynn Macau, which will be the first fully Vegas-style casino- hotel complex in Macau (the Sands is just a casino with few hotel rooms). Wynn aims to bump up hotel rates in Macau with large guestrooms the same way he has in Nevada.

Galaxy's first large casino hotel, the HK$2.5 billion StarWorld, will open late in the year. And Stanley Ho's Sociedade de Jogos de Macau, still the dominant casino operator, has two big projects in the pipeline: The HK$3 billion Grand Lisboa, a flamboyant hotel and casino that will be the territory's tallest building, and the HK$1.5 billion Crown Macau. Las Vegas Sands will also open a major extension of the Sands Macau.

Part of what made this year's growth seem sluggish was just a matter of timing. The severe impact of the 2003 SARS epidemic made last year's growth figures unnaturally big.

"The local economy last year grew rapidly at an unusual pace," said Macau Chief Executive Edmund Ho last week. "Market mechanisms have now regulated its speed and put the economy back on to a reasonable and healthy development track."

Falcone believes 2005 was also dampened by the anti-gambling crackdown Beijing launched in January. While Macau casinos were not a target, gambling-prone public officials and state company executives came under scrutiny by corruption investigators and may have put off trips to the territory or rebooked junkets for casinos more remote from state surveillance.

For two decades, the mainland has been a key market for Macau casinos, and in 2004 Beijing gave a boost by allowing mainlanders to visit independently rather than just as tour group participants. About half Macau's mainland visitors this year came via the program.

Under the surface, other forces were at work. In the past, mainland customers made up for their minority status with outsize bets on baccarat. In 2003, so- called VIP baccarat generated 77 percent of gambling revenue. Skeptics of the giant gaming palaces that are to open over the next few years have questioned whether a significant gambling market exists in Macau beyond VIP baccarat. The game's share of the market slid to 64 percent over the first three quarters from 72 percent last year.

Part of the new market is in low-end slot machines. Both SJM and Las Vegas Sands are betting heavily on new- generation machines to draw in mass- market players put off by typical table game minimum bets of HK$300. The machines' share of the Macau market continues to rise and so far this year it is triple its tiny 2003 slice.

Given the vagaries of Beijing's stance on gambling, investors are keen for Macau to develop new markets. Figures for 2005 show movement on this front. Visits from South Korea rose 83 percent and arrivals from Southeast Asia rose 56 percent. Other markets also posted strong growth numbers.

The catch is that visitors from South Korea and elsewhere are still few in number. Macau so far this year has welcomed one South Korean for every 100 mainlanders.

Growth has come with the multiplication of Macau's air links, previously focused on shuttling Taiwanese to mainland cities. This year, Tiger Airways of Singapore joined AirAsia of Malaysia in connecting Macau to Southeast Asia. Air Macau flew in Koreans and Japanese and agreed to share its local operating monopoly with two startups that promise to open new routes next year.

Las Vegas Sands' investment plans hinge on having Macau rival Hong Kong and Singapore in convention business. Though few showgoers visited this year, Venetian Macau executives announced preliminary agreements with 10 exhibition organizers to put on at least 20 large trade shows from 2007.

In the meantime, Macau struggles to draw non-gamblers. The government spent close to HK$4 billion on the East Asian Games, which played to near- empty stadiums. Another HK$150 million was spent on a successful drive to win inclusion in the UNESCO World Heritage, though also with little noticeable impact on tourist flows.

That said, Macau found some important new believers in its future. Morgan Stanley, Wachovia and Citigroup poured millions into Macau real estate. Investors supported K Wah Construction Materials' HK$18.4 billion buyout of Galaxy Casino then showed such an appetite for Galaxy Casino junk bonds that the gaming operator doubled the issue to HK$600 million.

Perhaps Macau is oversold. That's what Wahid Chammas, an analyst with US fund managers Janus Capital, has been telling reporters recently. "Anybody with a long-term horizon should still be able to make a lot of money," he said. "While everybody else has been panicking, I have been buying the living daylights out of these stocks."

As more than one mainland high- roller might tell him, betting big in Macau with other people's money is fun while it lasts.