I go upstairs to a restaurant called the Portas do Sol, which—a sign of the times—once served Portuguese fare but now offers Chinese food. A five-piece jazz ensemble from Sweden is playing "All of Me" ("So vye not take all of me," the blond singer croons). A dumpy Chinese lady in a see-through black shirt, a black bra, and a pink skirt jumps to her feet with a younger Chinese man dressed à la John Travolta in Saturday Night Fever. She cocks her head, and they sweep across the dance floor like Fred and Ginger. Soon the place is filled with a dozen couples dancing a perfect, competition-worthy fox-trot, then the cha-cha, and then tango. I ask somebody what the heck is going on—it turns out ballroom dancing is the rage here. Middle-aged Chinese women come every night with their young dance instructors for a bit of romance and practice.

After dinner, I head for my first dose of casino life. The old Crazy Paris Show, where Chinese men used to gawk at Russian dancers swimming naked in giant fish tanks, has moved to the new Grand Lisboa's casino. European pole dancers in leather bikinis and police hats writhe above a sea of Chinese heads. I consider the blackjack tables but, intimidated again by the seriousness of the crowds, decide to postpone gambling until another day. Down the street at the Sands, a Filipino girl band in skimpy black costumes is belting out 1980s rock and roll covers. Four go-go dancers in bikinis are shimmying above the bar. Except for the performers, I seem to be the only foreigner.

While go-go dancing isn't exactly the highest form of creativity, it turns out that these are boom times for the arts, too, in Macau. The territory's government—fueled by the casino revenues—is funding cultural programs like never before. A well-attended new Macau Museum of Art exhibits avant-garde work from both the West and mainland China. "We can bring the cultures together here," says Ung Vai Meng, the museum's exuberant director. He is especially proud of a permanent exhibit of black-and-white photographs showing Macau's history—refugees, firecracker factories, street life. "We must not forget our roots," he says.

Over a dinner of Portuguese bacalao, Leung Hio Ming, the new director of the music conservatory (he studied piano in the United States), shares his excitement about the cultural renaissance. "The Portuguese were here for four hundred years, but they never cared about developing this town," he says. As a result, for two or three years after the handover, he says, the city—his school included—experienced difficult times. Now, with new financial resources, Leung has established admissions procedures and academic standards and helped found an international music festival and an arts festival. The school's student body has jumped in size from about 300 to 1,800, and there are now more than one hundred teachers, compared to only ten a few years ago. "The government seems to see the arts as an antidote to the poison of gambling. For us, this is really a golden age."