Macau Casinos and Gambling News

[SeeMacau]

Macau's rapidly developing casino industry is taking between HK$10 billion and HK$15 billion in gambling dollars out of Hong Kong every year, Jockey Club chairman Ronald Arculli said Sunday.

This represents a serious threat to the Jockey Club's financial fortunes and could result in a loss of revenue for the government, he told Radio Television Hong Kong in an interview.

Arculli also said that should the government agree to establish a tourist-only casino on Lantau, the Jockey Club should be allowed to run it to ensure that the gaming dollars and the profits remained in Hong Kong.

Arculli's claim was disputed by Deputy Secretary for Home Affairs Stephen Fisher, who said the drop in the club's turnover is not linked to Macau developments and that the decrease in racing revenue is being compensated by football betting income.

Arculli said he was delighted when the betting turnover for the Lunar New Year race meeting on February 11 reached HK$1.043 billion, the highest single-day turnover for the current season and HK$20 million up on last year's Lunar New Year take.

Attendance was also up from 74,322 last year to 76,030.

However, Arculli said the club's consultants had warned that, with Macau's gambling industry mushrooming, the turnover in Hong Kong could drop between HK$10 billion and HK$15 billion a year.

This was despite the recent cross-betting arrangement that allowed punters in the former Portuguese enclave to bet on Hong Kong races through Macau betting outlets.

Current figures indicate this to be around HK$20 million a meeting.

Arculli said that should the predicted drain of gambling dollars come about, the turnover from horse racing for the current season could drop between
10 percent and 20 percent over last year's total of HK$65 billion.

Macau had earlier estimated that the net profit from its gambling industry could reach US$5 billion (HK$39 billion) a year.

``Some other places such as Singapore and Thailand are also establishing casinos and developing their gambling industries,'' Arculli said. ``Some of them are also decreasing their betting tax.''

``We have been passing on this information to the government during discussions on our call for a change in the way horse racing is taxed.''

Arculli said tycoons in Macau have been stepping up their efforts to attract gamblers from Hong Kong.

And at least nine cruise ships catering to gamblers leave Hong Kong shores each day.

Arculli said that in an attempt to offset this drain on gaming dollars, the club would cooperate with travel agencies and Hong Kong Tourism Board to attract more mainland visitors to its two racecourses.

The club's annual turnover for horse racing peaked at HK$92.3 billion in 1997.

There were small but steady declines for the next two years before a slight rise in 2000-2001 when the club increased the number of race meetings a year from 75 to 78. It has been downhill since then, reaching HK$65 billion at the end of the last racing season in June.

Arculli said the club's discussions with the government on its proposal to change the way racing is taxed were making only ``a little progress.''

The government currently takes 12percent off standard win, place and quinella bets and 20 percent on exotic and multiple bets.

The Jockey Club wants the government to switch from a tax on bets to a tax on gross profits, as is now the case with football betting.

Arculli said that in addition to trying to convince the government, the club feared that lawmakers did not fully realize the importance of reforming the betting tax system.

He said it is not pushing for a change in the system to increase betting revenue but to help the government secure a stable income in addition to enabling the club to donate HK$1 billion each year to charity.

According to sources, one of the reasons why negotiations with the government are dragging is because Financial Secretary Henry Tang does not want to become personally involved.

Tang is a long-time member of the club as well as a horse owner and fears he could be accused of a conflict of interest should the club be seen to be getting special privileges.

Arculli said he personally feels that a casino on Lantau is not a good way to raise additional revenue for the government.

However, since it could help attract tourists and develop Hong Kong's financial market, the Jockey Club should be granted rights to operate it.

``We are a non-profit making organization. This ensures that profits generated from the casino will go to the government and to charity organizations,'' he said.

Fisher rejected Arculli's claim that the decrease in betting turnover was caused by Macau's gambling industry.

He said the drop in turnover was due to the fact that youngsters were not interested in horse racing.

He also believed that income from football betting could offset the loss in horse racing.

[SeeMacau]

February 21, 2005
NEWS; Pg. 2
285 words

Jimmy Cheung

Macau's flourishing casino business may draw an extra $ 15 billion away from the Hong Kong Jockey Club each year, the club chairman has warned.

Ronald Arculli also said if the government gave the go-ahead to develop casinos on Lantau, the club should run the businesses as non-profit enterprises.

The club's own consultancy studies have estimated Hong Kong could lose $ 10 billion to $ 15 billion in betting turnover annually to Macau because of the growing casino industry.

The figures were based on Macau's own estimate of an annual $ 40 billion in profit this year.

"The amount of betting turnover lost could be enormous. We have to tackle the problem," Mr Arculli told an RTHK radio programme yesterday.

He said the club had briefed the government on new casino proposals and betting duty changes in other places in the region, and called for suitable reforms to keep up with the trend.

Another proposal to curb the loss of turnover is to scrap the summer break on horse racing.

"We have to discuss with the government a package of measures, including taxes and operation ... each aspect has to be thoroughly considered," he said.

Responding to the Liberal Party's call to develop casinos on Lantau, Mr Arculli, formerly the party's vice-chairman, believed there would be huge resistance from education and religious groups.

"I don't think we need casinos from a taxation point of view. But for the sake of tourism and Hong Kong's status as a financial centre, having casinos would make us more attractive," he said.

Mr Arculli said if the government went ahead with such a plan, the Jockey Club should be allowed to run the business on a non-profit basis.

February 21, 2005

[SeeMacau]

Wednesday, February 23, 2005
By Craig Karmin, The Wall Street Journal

Global investors are placing a big bet on Chinese gambling.

Shares of Las Vegas Sands Corp., which operates a lucrative casino in China's Macau territory, have soared 64 percent on the New York Stock Exchange since the company's initial public offering of stock in December. Wynn Resorts Ltd., which is poised to open its own Macau casino in 2006, has jumped 105 percent over the past 52 weeks in Nasdaq Stock Market trading.

But money managers eager to double down their bets are playing two Chinese companies with the most direct exposure to Macau's gambling, hotels, transportation and tourism: Shun Tak Holdings and Melco International Development. Both stocks are listed only in Hong Kong, but U.S. investors can buy them through certain brokers, usually with an additional fee.

Analysts say it is only a matter of time until Macau surpasses Las Vegas as the world's largest and most-profitable gambling and convention center. The former Portuguese colony is just 40 miles from Hong Kong and is the only place on mainland China where casinos are permitted.

"This is a real long-term growth story," says Alexander Muromcew, portfolio manager with TIAA-CREF. The big pension fund -- formally known as Teachers Insurance and Annuity Association-College Retirement Equities Fund _ owns shares of Shun Tak, Melco, and Far East Consortium, a Hong Kong-based property company that is developing Macau casinos.

With Chinese enthusiasm for gambling and the territory's boomtown prospects, there is little doubt these stocks offer a chance to hit the jackpot. But since these stocks already have had a big run and with questions over investor protections _ the odds may be longer than many investors think.

There already are concerns about overdevelopment as new operators rush in hoping to lure the world's high-rollers, many of them Asians, away from Las Vegas. Goldman Sachs warns that the number of Macau gambling tables is poised to rise to 3,700 by 2008 from 845 at the end of last year. That compares with about 2,500 tables currently on the Las Vegas strip. "If demand fails to meet the new supply, this could lead to declining returns in Macau's gaming sector," Goldman says.

Merrill Lynch, meanwhile, forecasts that 2004 gambling revenue was $5.2 billion in Macau, an increase of nearly 50 percent over the previous year. That compares with about $5.3 billion in revenue last year for the casinos along the Las Vegas strip. Macau's gamblers also are skewed decidedly toward high-stakes games like baccarat, while Las Vegas gamblers lean toward slot machines and other mass-market games, such as blackjack and roulette.

Investors also have raised concerns about the treatment of minority shareholder rights and, more seriously, over lingering crime and corruption. Last year, a Macau casino operated by longtime gambling kingpin Stanley Ho faced media allegations of a money-laundering plot that enabled mainland tourists to circumvent currency-exchange limits on people leaving China. Mr. Ho has denied any wrongdoing.

Foreign investors know that many of China's most-promising stocks have faltered on unforeseen difficulties or problems with management. And for all of China's vast potential, few fund managers have been able to translate the country's rapid economic growth into profitable investments. Some already are skeptical about the relative value of the gambling sector.

"In an industry where there is a history of underreported earnings, these stocks are risky plays," says Constance Hunter, managing partner at Coronat Capital Management, a New York-based hedge fund, which doesn't have any holdings in Macau. "There are a lot of other China investments that look less risky."

Still, even skeptics acknowledge that Macau has evolved significantly over the past few years.

The Portuguese legalized gambling there in the 19th century, and the territory was returned to Beijing in 1999. Gambling had long run as a government-sanctioned monopoly until 2002, when the Macau government liberalized the industry by awarding three licenses.

One license went to a group run by the 83-year-old Mr. Ho, who controls Shun Tak and whose son, Lawrence Ho, 28, is chief executive of Melco. Another license went to Galaxy Casino Co., a joint venture between Hong Kong investors and Las Vegas Sands. The third went to Wynn Resorts. Additional licenses may be granted in the future.

"We believe we have the potential to earn more out of Macau than from Las Vegas," says William Weidner, president and chief operating officer for Las Vegas Sands, which plans to open a second beachhead in Macau, a resort on the territory's Cotai strip, by 2007.

In 4 p.m. composite trading on the Big Board, shares of Las Vegas Sands fell $1.43, or 2.9 percent to $47.62, giving the company a market capitalization of $17.2 billion. In Nasdaq Stock Market 4 p.m. composite trading, the stock of Wynn Resorts, which has a market value of $7.13 billion, fell 3.5 percent, or $2.57, to $70.17.

Shun Tak is the center of it all. While it operates multiple businesses, including many in Hong Kong, Goldman Sachs estimates that its property, transportation, gambling and hotel assets in Macau should account for 88 percent of its net profits by the end of 2008, up from only 30 percent in 2004.

Tourism from mainland China to the territory also is soaring, up to 9.5 million visitors last year, more than four times the number in 2000.

Melco is expected to see gross gambling revenue at its high-end Park Hyatt casino jump to $300 billion in 2009 from $140 billion in 2003, according to Smith Barney.

The brokerage firm also expects Melco to make a bid for a gambling license in Singapore and sees another potential investment in Cotai, an area of Macau that is expected to develop into a Las Vegas-style strip.

But before Macau emerges as the world's pre-eminent gambling center, these stocks could face selling pressure. "The proliferation of the Macau concept is reminiscent of the (technology-media-telecom- munications) bubble" of the late 1990s, Smith Barney says in a report. The brokerage firm rates Melco a "hold" but with a price target of 20 Hong Kong dollars ($2.56).

Following huge gains last year, both stocks have been highly volatile and 3 percent to 5 percent daily moves are common. Shun Tak shares surged 195 percent in 2004, while Melco jumped to HK$19.70 from HK$1.97, though both are down slightly this year.

Shun Tak's shares were unchanged Tuesday on the Hong Kong Stock Exchange at HK$8.25, while Melco fell 1.7 percent to HK$17.55.

As with other family-run Asian conglomerates, minority shareholders often come up on the short end of the stick.

In 2002, Shun Tak offered a rights issue that enabled three of Mr. Ho's daughters, who also were Shun Tak directors, to increase their stake in the company to 11.3 percent from 1.6 percent at a significant discount to its net asset value. Other shareholders weren't given the same opportunity.

[SeeMacau]

By Catholic News Service

MACAU (CNS) -- Three months before his graduation, Ah Wai quit school and abandoned plans to become a social worker in favor of dealing cards at a newly opened casino in Macau.

In January, the 23-year-old Macau resident was promoted to manager; he now monitors operations at gambling tables in the casino, reported UCA News, an Asian church news agency based in Thailand.

"My parents have been unemployed for a long time, and I have a mentally disabled younger brother to look after," Ah told UCA News. "Although I would like to pursue studies in social work, relatives and friends have urged me to take up a job with high pay to improve my family's income."

Macao, a special administrative region of China, has 17 casinos, and more are planned. As the "Monte Carlo of the Orient" continues to add casinos, church officials expressed concern that students may be sacrificing their future and long-term security by forgoing their education for the quick cash provided by casino jobs.

Choi Chi-u, principal of Jesuit-run Star of the Sea College, warned that this phenomenon is having negative effects on the character of local students, who end up with a skewed vision of what money means.

Young casino workers see money changing hands quickly, with gamblers wagering tens of thousands of dollars at a time. They may think money is a means of entertainment, Choi said.

"Compared with the gamblers' stakes, employees may feel their salaries too small, and that would arouse a pressing desire to earn fast money," he said.

The nature of a dealer's work is monotonous, and the training he or she receives deals merely with techniques for table operations, Choi said. Also, the shift system effectively keeps casino employees from pursuing formal studies at the same time, he added.

But casino workers receive salaries higher than those otherwise available in Macau for the same skill level. A dealer's monthly salary is about $1,500-$1,900, almost equivalent to that of a junior civil servant, who is required to have a university education. Casinos also provide all necessary training, which attracts young people without much work experience or higher education.

Salesian Father Peter Pong Ping-fai, chairman of the Catholic Schools Council in Macau and a school principal, said he advises young job seekers to consider more than just the salary a job offers. He asks them to also consider aspects such as job satisfaction, the possibility to exercise one's potential and the meaningfulness of the work.

Father Joao Evangelista Lau Him-sang, parish priest at Cathedral of the Nativity of Our Lady, said the church should draw up a plan for providing pastoral care to those working in the gaming industry. Even people who are not Catholics have approached the church for spiritual support and guidance, he said.

The church can help people maintain a proper attitude toward the gaming industry and its employees, he said.

"As long as we stay rational and responsible, entertainment is good for a person and acceptable to the church," the priest said.

"The church should witness and emphasize one's outlook of life, morality and responsibility to get rid of temptations and addiction," he said.

Kou Cheng-un, a teacher and career counselor with a Catholic secondary school, said some students have quit school, giving up the hope of studying in universities, after securing casino jobs.

"Once, a parent came to school to seek permission to allow his daughter to drop out right before the preliminary school finishing examination so that she could take up a dealers' training course," Kou said.

The minimum age for employment in Macau is 16, but casinos hire people in the 18-35 age range. They first screen candidates, sending those who pass for a six-month training course, followed by a formal recruitment test. Those attending the training are given an allowance.

Choi said his school has responded by seeking to strengthen morality through religious studies and life education, teaching students that the pursuit of wealth is not a proper basis for a value system.

Closer teacher-student relations would enable teachers to be more sensitive to students' psychological condition and provide needed counseling, Choi said. He recommended that schools encourage students to participate in activities and volunteer work to understand that work not only satisfies personal wants but also serves others.

Ah said that, despite the good pay, working in a casino has a down side.

"Working in this U.S.-invested casino is meaningless to me, except for the good income. I seldom have a chance to talk to colleagues or build friendships with them. The top management is filled with foreigners, making me and other local staff members feel inferior," he said.

Moreover, the job "does not provide a written contract," he said, expressing fear that he would have trouble defending himself "in the case of a labor dispute."

Asked about plans for the future, he said he had none.

[SeeMacau]

MACAO, March 4 (Xinhuanet) -- A senior executive with the Wynn Resorts (Macao) expelled worried that the parent company's involvement in Singapore's casino bidding would hinder its investment plan in Macao.

Friday's Macao Daily quoted Grant Bowie, President and General Manager of the Wynn Resort (Macao), as saying that the company considered that Singapore's latest endeavor to introduce a casino would have no impact on Macao's gaming industry.

He said that the Wynn Resort (Macao) has started employment. The company will organize a big job fair by the end of the year hoping to recruit some 4,000 people to meet the demand for the launch of its business.

The US casino mogul Steve Wynn announced his plan for a 705 million-US dollars worth Las Vegas-style resort in Macao last year.

Bowie held that Macao has laid a solid foundation of the gaming industry. In the next two or three years, there will be several casinos and entertainment groups coming off stream.

Bowie disclosed that the company is still looking for other investment projects in Macao. He considered that the parent company would reinforce its confidence in expanding investment in the Asian region if it won the bidding in Singapore.

Bowie has more than 20 years of industry experience. He had previously managed Australia's Conrad Jupiters and Treasury casinos.

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Casinos give Macau coffers 30pc boost
Mark Lee, Hong Kong Standard
March 7, 2005

Macau's mushrooming casino industry pushed up the territory's gaming revenues by 30.1 percent in 2004 to 38.6 billion patacas (HK$38.09 billion), according to figures released Sunday by the Macau government, creating a record government budget surplus.

Mainland tourist arrivals to the gambling mecca skyrocketed by 66 percent in 2004, contributing 27 billion patacas to the economy, making mainlanders the highest spending visitors, averaging nearly three times higher than visitors from Hong Kong, who spent on average 1,000 patacas each.

Turnover from casinos is expected to account for about 95 percent of gaming revenues.

The rest comes from horse racing and lotteries. This would catapult Macau's casino market to second place behind only Las Vegas in terms of size, overtaking Atlantic City, assuming Atlantic City did not grow significantly from 2003 when it took in US$4.5 billion (HK$35.1 billion).

Last year, Macau's casino industry benefited from new players in direct competition with the Sociedade de Jogos de Macau (SJM), which had previously monopolized the sector.

The government broke up SJM's monopoly by granting casino concessions to US casino operator Wynn Resorts and Hong Kong-based Galaxy Resorts in addition to SJM.

The concession holders could in turn sub-license other operators to set up and run new casinos.

US casino operator Las Vegas Sands opened the Sands Macau last May, the first non-SJM operated casino there, after obtaining a sub-concession from Galaxy. Galaxy later opened Galaxy Waldo in July. SJM opened its Greek Mythology in December, to add to the 12 casinos it already operates and opened two more earlier this year.

While SJM is expected to continue to dominate the sector, the entry of new operators has added considerable impetus to its development, analysts said.

"The potential of the casino industry in Macau could be astronomical," said a lawyer who has been advising firms entering the industry. "The potential comes from the high number of people with substantial wealth, with a high propensity to gamble who live in the vicinity of Macau."

The lawyer said the casinos are increasingly catering for mass-market punters, moving away from a reliance on high-stakes gamblers.

"Casinos that operate this business model, such as Sands Macau, are also proving to be highly profitable," the lawyer continued. "Sands Macau managed to break even seven or eight months after opening in May last year."

An academic from the University of Macau, Davis Fong, predicted in a study last year that VIP baccarat play would contribute about 60 percent of the casinos' revenues in 2004, declining from 78 percent in 2003, as tourists take over from high net-worth gamblers as the main drivers of the industry's growth. Such a move is likely to suit Macau's gaming industry as the central government has recently launched a series of crackdowns on money laundering, as well as banning members of the Communist Party from gaming tables.

In 2004 the industry generated tax income of 14.7 billion patacas, representing nearly 70 percent of total tax receipts in the fiscal year ended December, helping it achieve a record budget surplus of 6.2 billion patacas.

[SeeMacau]

9/3/2005 15:16

The education authority in China's Macau Special Administrative Region (SAR) has found that 624 students left school to pursue high-paid jobs in casinos last year.
Macau Post Wednesday quoted Sou Chio Fai, director of the Education and Youth Affairs Bureau as saying that the number signified the most serious school dropout phenomenon in the past seven years.
In the 2003-2004 school term, Macau has 98,255 students on campus. The bureau's investigation found that a total of 4,908 students left school in that term, and some 80 percent of them were aged 16 or over. Nearly half of the school dropouts have found jobs in the gaming or catering sectors.
Sou said that the bureau would do its best to persuade students to complete their school education before entering the job market.
There are currently 17 casinos in Macau, and more are under construction, which would offer thousands of jobs in the next two years. Students are wooed by the fast-earning jobs in the sector.
The gaming industry has existed in Macau for over 100 years. The industry has sustained its vigor after Macau returned to China in 1999, which has been guaranteed by the principle of "one country, two systems." As the only place in China, where gambling is legal, Macau liberalized the sector for overseas investment in 2002, and designated it as the city's economic backbone.

[SeeMacau]

Zach Coleman


March 10, 2005


The Sands Macau casino's push into the lucrative high-stakes baccarat market is producing returns already, company executives said Wednesday.

Gamblers bought US$144 million (HK$1.12 billion) worth of chips to play on the Sands' high-limit tables between October and December, more than triple the US$45 million bought there between July and September, said Brad Stone, executive vice-president of parent company Las Vegas Sands during a conference call with analysts.

``We expect this market to start showing meaningful increases in gaming volumes in the second half of this current quarter,'' he said. This is because the casino this month raised its commission rates to snare more big-time gamblers, as reported by The Standard last week.

Las Vegas Sands president and chief operating officer William Weidner said that already this year the Sands has linked up with four junket agents, adding to the two it partnered with at the end of last year.

High-stakes baccarat traditionally accounts for most of the revenue generated by Macau's casinos.

The Sands has entered the competition for high rollers gradually out of concern about disreputable junket agents who could affect Las Vegas Sands' standing with United States regulators.

Weidner said some high rollers avoided Macau during the Lunar New Year holiday to avoid crowds.

``Our traffic counts were the lowest we've ever seen in the first few days'' of the holiday, he said. ``Then we went from record low attendance to record high attendance in a matter of two days.''

Weidner said Las Vegas Sands had replaced Thuy Thinh with Frank McFadden as its senior executive in Macau late last year because the company wanted a ``more aggressive style'' of management and an executive with a wider spread of international experience and greater seniority to direct the move into the VIP market and the development of the company's next Macau projects.

Next up is the Venetian Macau casino resort, which Stone said should open in late March 2007.

He said reclamation work for the project, set for the new Cotai area between Taipa and Coloane islands, is complete.

Chief financial officer Scott Henry said the company is exploring raising funds for the US$1.8 billion project in Macau but does not expect to take out new loans until the end of the year.

Weidner said Macau has approved Las Vegas Sands' plans for the area around the Venetian, which it calls the Cotai Strip.

Firms interested in building resorts there that would house Las Vegas Sands-operated casinos have signed up for six sites. Weidner said the approved plan encompasses 11,500 hotel rooms.

Weidner also confirmed, as The Standard reported on Wednesday, that there are plans to expand Sands Macau, but dodged a question on details.

Stone said bettors at the Sands' public gaming tables actually bought US$45 million fewer chips in the fourth quarter of 2004, which Weidner implied may have been partly due to gamblers checking out newly opened casinos.

He is confident these gamblers will soon return.

``We'll see the market go into places like Greek Mythology, Golden Dragon, and a couple of the other conversions of ballrooms, lobbies, [and] broom closets,'' he said. ``The new places that have opened and the new capacity that's been added is inferior by a long shot to what it is that we have.''

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Regal joins Venetian in Macau hotel venture
Gladys Tang, Hong Kong Standard
March 14, 2005

Regal Hotels International has unveiled plans to team up with United States-based casino operator Venetian to develop a hotel project in Macau.

An announcement on the deal, which had been rumored for months, came at the weekend after the two parties signed an agreement to develop a hotel project with gross floor area of 3.4 million square feet in a resort at Cotai, according to a statement to the Hong Kong stock exchange.

The project, which includes hotels, casinos, entertainment and conference facilities, will be built in two stages.

Phase one consists of a 1,500-room hotel with catering, casinos and shops.

Construction of phase one will begin later this year and it is expected to be completed by 2007, Regal said.

Phase two consists of a hotel with no less than 1,500 rooms with an extension for a casino and a shopping mall.

The Hong Kong-listed hotel operator, which owns five hotels in Hong Kong, said the project could help improve the company's prospects.

It did not disclose the investment amount, although executive director Donald Fan earlier said it had planned to put in HK$1 billion to HK$2 billion for construction.

Companies are rushing to invest in Macau, betting on its potential growth driven by casino business and tourism.

Pearl Oriental Enterprises bought a 40 percent stake in Golden Dragon, Macau's newest casino, for HK$514 million in January.

Regal is also poised to expand its presence in Hong Kong to meet the tourist demand and has set aside HK$100 million to expand its four-star Regal Riverside Hotel in Sha Tin to as many as 1,080 rooms from the current 830 and enlarge the 425-room Regal Hongkong Hotel in Causeway Bay by 50 to 60 rooms.

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Pearl Oriental to go ahead with Golden Dragon buy
Zach Coleman, Hong Kong Standard
March 15, 2005

With Macau's booming gambling market spurring on an investor frenzy, Hong Kong-listed Pearl Oriental Enterprises is plowing ahead with a half-billion-dollar Macau casino hotel investment despite encountering a financial black hole.

Pearl Oriental said Monday it will move ahead with its planned acquisition of a 40 percent stake in the new Hotel Golden Dragon even though it has been able to get a look at only the past year's books for the company that owns the hotel.

That company, founded in 1990, was owned by the Fujian province finance department until last March.

Pearl Oriental is not alone in taking a gamble.

Regal Hotels International director Donald Fan said Monday his company will invest HK$2 billion-HK$2.6 billion to build a 3,900-room resort in the "Cotai Strip" development directed by American casino operator Las Vegas Sands.

Fan did not give the terms of the deal with Sands, which will operate a casino and convention facilities inside the resort, but predicted Regal will earn a full return on its investment within four years of its 2007 opening.

Regal, which struggled under a mountain of debt until a restructuring deal last year, said it will fund the project from internal sources.

The first phase of the two-stage project will include 1,690 guest rooms.

In an interview in the new issue of China Business Review, Las Vegas Sands president and chief operating officer William Weidner said besides Regal, the Cotai Strip will feature resorts under the Four Seasons, Marriott International's Renaissance and InterContinental Hotels Group's Holiday Inn brands.

In a circular sent to shareholders Monday, Pearl Oriental's board said it viewed the risk in investing in Golden Dragon without a full look at its records to be acceptable and outweighed by potential returns, especially since the businessmen who are selling shares to Pearl Oriental have agreed to indemnify it against any hidden liabilities.

The businessmen have also guaranteed that Golden Dragon's annual net profit for the next three years will be at least HK$200 million or they will make up the difference.

They pledged once Golden Dragon repays HK$179.5 million in loans, at least 70 percent of profits will be paid out in dividends.

Pearl Oriental, however, has decided to hedge its investment a bit.

The company said previously Golden Dragon would collect 40 percent of casino gross profits, but now Golden Dragon will receive 24 percent of the profits and HK$26.4 million a year in rent via a marketing joint venture with Golden Dragon chairman Chan Meng-kam. Pearl Oriental said the deal "will be of great benefit to the business of the gaming casino" because of Chan's experience in recruiting high rollers from Fujian.

The circular includes an independent valuation on the Golden Dragon, appraising the hotel's worth at HK$1.65 billion.

The Fujian finance department sold the then-unfinished hotel last year for HK$281 million.

The hotel has regularly filled 85 percent of its rooms since its opening two months ago, the circular said.

The casino, run by Sociedade de Jogos de Macau, includes 80 public gaming tables, 107 slot machines and six VIP rooms, which together hold 15 more tables.

[SeeMacau]

Ernest Kong

Regal Hotels International plans to double the number of hotel rooms in its portfolio to 8,000 with a $ 2 billion complex in Macau that will include a casino and an opera house.

The ambitious project, a 3,900-room hotel in the territory's Cotai resort area, was disclosed only five months after the Hong Kong-listed firm's chairman, Lo Yuk-sui, ended a debt-restructuring programme that spanned seven years and three companies.

Executive director Donald Fan Tung said the 3.4-million-square-foot project, to be developed in two phases, would comprise a 170,000 sqft casino and an opera house, both of which will be leased by Las Vegas-based casino operator Venetian Group.

"The development will be funded by internal resources and bank finance," said Mr Fan, adding the investment would correspond with the construction progress, which could take less than four years.

Mr Fan said the hotelier, which manages five hotels in Hong Kong and two in Shanghai, would not be involved in the gaming business. He would not comment on the details of the agreement nor explain how the hotelier would secure rental income.

Regal Hotels executive director Poman Lo said: "Macau is the only resort destination in the whole of China for gaming ."

Mr Fan said: "We have signed a memorandum of agreement. We are prohibited to disclose the details of the lease at the moment."

According to a company announcement released on Sunday, the memorandum is not legally binding and the agreement is not yet finalised.

Mr Fan said construction of the project's first phase, comprising 1,690 rooms, would begin by the end of this year. A decision over the remaining 2,210 rooms would depend on the success of that phase.

"The first phase of the project will start bringing us net operation profit in 2008," said Mr Fan, who expected about $ 300 million in operational profit in the first year from a room rate of about $ 600 to $ 650 per day.

"The room rate is similar to hotels in Hong Kong but the land cost and operation costs are much cheaper," said Mr Fan, who would not say how much was paid for the land.

At the height of Mr Lo's financial problems, his firms - Century City International Holdings, Paliburg Holdings and Regal Hotels - struggled with about $ 14.8 billion debt.

In October last year, Mr Lo agreed to a $ 1.79 billion debt-restructuring programme for Century City with creditors.

[SeeMacau]

MACAU: American gaming giant Sands was to unveil Friday plans for a new hotel and gambling complex that will set Asian gambling haven Macau on the road to becoming the world's biggest casino attraction.

Sands was to lift the covers off details of its Macau Venetian resort, an almost identical replica of its famous hotel and casino namesake in Las Vegas.

The leisure centre, which will include conference and entertainment facilities, will be the first of some 25 new casinos and resorts due to be built in the former Portuguese enclave, ruled by China since 1999.

Sands, the largest casino operator in Las Vegas, has spearheaded a revolution in Macau's once ailing gambling industry.

The opening of Sands Macau, a precursor casino, in May last year brought American-style glitz and pizzazz to an industry once marked by seedy and smoky, crime-ridden gambling dens.

Coinciding with a huge spike in tourists from mainland China, Sands helped transform the once-sleepy enclave, long Asia's premier gaming haven, and produce double-digit economic growth.

Income from the city's dozen or so casinos is expected this year to eclipse the seven billion US dollars earned by Las Vegas last year.

Success has come at a cost. The territory, with a workforce of just 250,000, is already feeling a labour crunch as the mushrooming casinos drain the labour pool.

The influx of tourists has also stretched the city's transport infrastructure to snapping point.

[SeeMacau]

March 18 (Bloomberg) -- InterContinental Hotels Group Plc, Four Seasons Hotels Inc. and Marriott International Inc. will join Las Vegas Sands Corp. in the development of a $12 billion Vegas-themed gambling strip in southern China's Macau.

``What Asia needs is an Asian Las Vegas,'' Sands Chairman Sheldon Adelson, 71 said today in Macau as he unveiled the $1.8 billion first phase, which includes seven casino-hotels. Four Seasons, Marriott, InterContinental and four other global hotel groups will be among a group of investors bearing 83 percent of the cost, Adelson said.

Regal Hotels International Holdings Ltd. will join Sands to construct the Venetian Macau, Adelson's second casino hotel in the former Portuguese colony, the only place in China where casino gambling is legal. Macau's gaming revenue may match that of Las Vegas by 2008, said analyst Jonathan Galaviz.

``Las Vegas, as a model, has shown that when you increase supply of entertainment, you inherently increase macro-demand for the destination,'' said Galaviz, a partner at Las Vegas-based equity research company Galaviz, Ong & Co. Adelson's vision to replicate Las Vegas in Asia is ``achievable.''

In Macau today, Adelson was joined at a briefing by hotel executives including Michael Evans, vice president for Asian hotels at Marriott International, the largest U.S. hotel company; and Matthew Fry and Stephen Ho, vice presidents for acquisitions at Starwood Hotels & Resorts Worldwide Inc., the No. 2 U.S. hotel company.

The hotel executives declined to comment on their plans for Macau's Cotai, a stretch of reclaimed land in about the size of two football stadiums. Adelson aims to fill Cotai in seven to 10 years with casino resorts providing 60,000 rooms.

`Untapped Segment'

The Venetian, which will be bigger than the $240 million Sands Macau that opened last May in downtown, will be sited on Cotai. The new resort will provide 3,000 suites, about three- quarters of the size of the Las Vegas Venetian, which has some of the most expensive room rates in that city.

Hotels in Macau should be able to develop ``an untapped segment of the market,'' said Eric Wong, an analyst at UBS Securities Asia Ltd. in Hong Kong. ``All you need is for the current Macau visitor to stay longer, rather than just the typical middle-aged male going there to gamble.''

Regal Hotels said this week that it signed an agreement with a unit of Sands to build a hotel in Macau. The first phase of the project will be a 1,500 room hotel to be run by Regal and a casino and convention center run by Sands unit Venetian Group, Regal said in a Hong Kong stock exchange statement on March 14.

Manuel Joaquim das Neves, director of the Macau Gaming Control Board, estimated more than 20 casinos will be operating by 2007 in Macau. Tax revenue from gambling made up about a third of the city's economy in 2003 as more visitors from neighboring China gambled in the city after the Chinese government eased travel rules.

Singapore May Compete

Chinese personal incomes rose last year as surging Chinese trade pushed the mainland's economic growth to 9.5 percent. Per capita disposable income in China's urban areas, home to a third of the nation's 1.3 billion people, rose 7.7 percent to an inflation-adjusted 9,422 yuan ($1,138) last year.

In Las Vegas, the four-mile Strip is filled with almost two dozen casinos, two-thirds of which are run by Sands' larger rivals Harrah's Entertainment Inc. and MGM Mirage. The city of Las Vegas had about $8 billion in gross gambling revenue last year, compared with $4 billion in Macau, Galaviz estimates.

Singapore is considering whether to legalize casino gambling and has invited proposals for a casino resort. Sands and 18 other companies have submitted offers, aiming to tap some of the $13 billion in legal gambling revenue generated last year in Asia. Galaviz projects Asia may generate $24 billion in legal gaming revenue by 2007, up 85 percent from 2004.

`Big Investment'

Adelson and Wynn Resorts Inc., the casino company led by rival Stephen Wynn, aim to tap the imagination of the Chinese by decorating their casino resorts with fake volcanoes and mock Roman amphitheaters. Wynn is building the Wynn Macau, set to open in 2006.

Sands President William P. Weidner said today the company was sticking with its forecast that the Sands Macau will become profitable after its first year.

``It is, after all, a big investment,'' he said.

Macau has 15 casinos, 13 of which are run by Hong Kong-born Stanley Ho, who held a 42-year gambling monopoly until 2002. Ho has no participation in Cotai, Adelson said.

``Stanley Ho has other casinos to protect,'' Adelson said ``If I were him, I would protect them.''

[SeeMacau]

By MarketWatch
Last Update: 5:28 AM ET March 18, 2005

TOKYO (MarketWatch) -- Las Vegas Sands president and chief operating officer Bill Weidner said Macau gaming revenue should reach $6 billion this year, according to a published report.

The U.S. gaming giant has unveiled plans for a $1.8 billion casino complex in the former Portuguese colony near Hong Kong. Its Macau Venetian resort, unveiled Friday, is an almost identical replica of its famous namesake hotel and casino in Las Vegas.

Weidner believes that gambling earnings in Macau will grow 20 percent per year for the foreseeable future, after posting a record $5 billion last year, and eventually outstrip the $9 billion Nevada State casinos pull in each year, AFX-Asia reported.

The U.S. firm is among half a dozen or so major hotel groups that have signed on to open properties on the Cotai Strip, a 100,000-square-meter offshore reclamation site.

[SeeMacau]

18/3/2005 15:14

Tycoon Stanley Ho Hung Sun's Macau Tourism and Amusement Company (STDM) earned 3 billion patacas (US$375 million) in profits last year, up 20 percent year-on- year, Macau Daily reported Friday.
The parent company of the Macau Gaming Co Ltd (SJM) attributed the rosy yearly payoff to the sound economic performance and a booming gaming-tourist industry.
Stanley Ho held a 40-year monopoly of Macau's gaming market through STDM till 2002, which still retains 80 percent of the shares in SJM. STDM's revenue was mainly reaped from the gaming and real estate sectors.
SJM turned 13 billion patacas (US$1.6 billion), or some 35 percent of its gross revenue, to the government's tax coffer last year, up 18 percent from the previous year.

[SeeMacau]

By Dominic Whiting

MACAU (Reuters) - Hoping a new Las Vegas will rise from the sea off the southern tip of China, multi-billionaire gaming tycoon Sheldon Adelson has unveiled his "dream" plans for a strip of casinos, plush hotels and shopping malls in Macau costing up to $15 billion (7.8 billion pounds).

The world's 19th richest person, who flies from the United States to the former Portuguese enclave of Macau in his private jet once a month, said his planned Cotai Strip project would give Asia its first "neon alley" entertainment venue.

A former Portuguese colony handed back to Beijing in 1999, Macau is the only place in China where casino gambling is legal.

Flanked by executives from investing hotel operators including Hilton Group's Hilton International, Marriott International and Four Seasons Hotels Inc., Adelson told reporters the three-phase development would feature 60,000 rooms in seven casino hotels.

By comparison, Las Vegas has 130,000 hotel rooms.

The centrepiece of Adelson's vision is the $1.8 billion Venetian Macau, to be built by Adelson's Las Vegas Sands Corporation, a copy of the themed casino, conference and entertainment complex of the same name in Las Vegas.

"I had a dream one night. All of a sudden it came to me. There's room there and demand to create Asia's Las Vegas," Adelson, 71, told a packed news conference on Friday, as masked waitresses in sixteenth century Venetian costumes served champagne.

A model of the planned complex showed palm-lined avenues, gondoliers floating on canals and a dozen high-rise buildings.

PROPPING UP THE STRIP

A 10-minute drive away from the news conference, across a snaking bridge, construction workers hammer 14,000 piles into 4.7 square km (1.8 sq mile) of reclaimed land that has forged two of Macau's islands into one.

Steel and concrete pipes lie beside fields of dust, as trucks drive over a bridge from mainland China to unload earth under the gaze of giant statues of mythical goats.

The first phase of the project, to be completed in 2007, will include 10,000 hotel rooms, plus the Venetian's 3,000 suites, a 15,000-seat arena and 80,000 sq metres (850,000 sq ft) of shops.

"The mainland could send so many people that, if there were no piling, they would sink the strip," Adelson said of the voracious appetite for gambling in China.

Mainland Chinese visitors have thronged once-sleepy Macau since Beijing eased travel restrictions for its citizens two years ago. New investment, meanwhile, has poured in since Macau ended tycoon Stanley Ho's gaming monopoly in 2002.

Last year, Macau welcomed 16.7 million visitors, up 40 percent on 2003, which pumped up economic growth by 30 percent. Just over half were from mainland China.

Property prices have jumped 50 percent in the last year. Developers are rushing to build luxury flats to feed the Macau investment fever that has infused Hong Kong, an hour away by ferry or 10 minutes for those who can afford a helicopter ride.

A plush 1,000-square foot flat now costs about HK$2.2 million (US$282,051) -- still just a fifth of Hong Kong's prices.

PACKED TABLES

Macau's 16 casinos are booming.

In Adelson's one existing Macau casino, the 10-month old Sands, every baccarat table was surrounded by about a dozen gamblers at midday on Friday, mostly from the mainland.

According to CSFB, the legal gambling business raked in HK$40 billion in "total net wins" last year, up nearly half on 2003.

Analyst Gabriel Chan estimates gaming tables will double to around 4,000 by 2009, with about 600 reserved for VIPs and their high-stakes gambling. Based on 18 years of business, each "high roller" table is worth HK$841 million to a casino, Chan figures.

Although some of the older casinos with crumbling facades could lose ground to the glitzy newcomers, U.S. operators such as Adelson and his Las Vegas rival, Steve Wynn, might find it hard to compete for mainland business.

Many of the highest rollers in Macau are brought by tour operators who lend money and collect debts back in the mainland.

"The Americans still do not have the necessary connections," CSFB's Chan said in recent a note to clients.

Macau could also face increased competition for gamblers in Asia, with Singapore considering building a casino. Las Vegas Sands is reportedly interested in operating in Singapore.

Adelson was in a battling mood when asked whether local competitor Ho, who long held Macau's only gaming license, would invest in the Cotai Strip.

"He's not participating," Adelson said. "If I were him I'd concentrate on protecting his casinos."

[SeeMacau]

March 22, 2005 - 5:34PM

Australia's richest man and most famous gambler, Kerry Packer, has increased his foothold in the lucrative gaming haven of Macau.

Mr Packer's Publishing and Broadcasting Ltd and its joint venture partner Melco International Development Ltd have boosted their stake in a company that will build and own a new hotel and casino in Macau.

The 50:50 partners said on Tuesday their joint venture vehicle would buy the remaining 30 per cent it did not already own of Great Wonders Investments Ltd for about $65 million.

"The purchase price to be paid for by the joint venture is $HK400 million (approximately $65 million) and will be met from the existing funds of the joint venture," PBL said.

Last year, PBL teamed up with Melco, a company controlled by the family of Asian casino tycoon Stanley Ho, to expand their gaming interests in Asia, Australia and New Zealand.

Their joint venture's first project was the purchase of 70 per cent of Great Wonders which is building the hotel and casino on the island of Taipa, about 10 minutes drive from Macau via a bridge.

The pair plan to expand further in Asia with Melco to hold 60 per cent of any opportunities in Greater China, while PBL will get 60 per cent and Melco 40 per cent of opportunities elsewhere in Asia.

Macau, the only part of China where casinos are legal, has grown into one of the largest gaming markets in the world since additional gaming licences were granted four years ago.

CSFB analysts said in a research note the total net win of Macau's gaming industry was growing at a rate of 40 per cent a year with no sign of slowing.

PBL's executive chairman James Packer recently told analysts the joint venture was also bidding for one of two licences to build and operate a casino in Singapore.

CommSec analyst Olivia Cartwright said the announcement on Tuesday showed the joint venture was moving forward although it would be sometime before its success could be gauged.

"It's just another step in consummating the joint venture relationship," Ms Cartwright said.

Shaw Stockbroking analyst Greg Fraser said the joint venture's success would depend on what they can secure in terms of contracts.

"The Singapore one is the first off the block but there is fierce international competition for that," Mr Fraser said.

PBL's shares closed 12 cents lower at $16.07 on Tuesday.

[SeeMacau]

Casino and gaming industry news provided by Financial News USA (OTC: FNWU). U.S. casino operator Las Vegas Sands Corp. (NYSE: LVS) announced Friday it has teamed up with seven major hotel chains to develop what it called an Asian version of the Las Vegas Strip in the southern Chinese gambling enclave of Macau. Magna Entertainment Corp. (Nasdaq: MECA) announced that it has appointed Former Massachusetts Governor and United States Ambassador to Canada Paul Cellucci as its Executive Vice-President of Corporate Development effective May 1, 2005.

Diamond I, Inc. (formerly AirRover Wi-Fi Corp.) (OTCBB: DMOI), a Wi-Fi-based communications solutions company, today announced that it has hired Alex Davis as Vice President of Corporate Development. Mr. Davis will assume his position with Diamond I immediately. Boyd Gaming Corporation (NYSE: BYD) management presented at the Lehman Brothers 2005 High Yield Bond and Syndicated Loan Conference in Orlando, Florida.

[SeeMacau]

Zach Coleman


March 25, 2005


Otis Elevator International has won a HK$20 million contract to supply elevators and escalators for the Wynn Macau casino hotel, continuing its dominance in the trade of moving people through the territory's major landmarks.

Otis will supply two escalators and 33 elevators of various types to Leighton Contractors which, together with China State Construction Engineering, is building the HK$5.5 billion gaming palace behind the Hotel Lisboa.

Wynn Macau is set to open by September next year with 400 guest rooms and 200 suites. The elevators will be used to provide separate entrances for the public, suite guests and high rollers.

Although this contract marks Otis' first entry into a casino developed by Steve Wynn, area director Ray White said the United States-based manufacturer's systems operate in the Bank of China building, the Macau Tower, Hotel Lisboa, the Hong Kong ferry terminal and the airport.

Otis employs about 40 staff in Macau. The company is likely to add two technicians to the team once the 23-story Wynn Macau is operating and White said he sees pressure mounting to raise salaries to retain employees.

He expects Macau to introduce regulations next year to require registration of elevator installation and maintenance companies as is typical in developed markets like Hong Kong. ``It's quite a laissez-faire arrangement right now,'' he said.

Demand for elevators in Macau outstrips that of Hong Kong, White said. At least a half dozen more large contracts are out for bid now in Macau as its low-rise developments give way to 20- and 30-story towers.

[SeeMacau]

MACAO – As reported by the China Daily: "In a meeting room in the heart of Sands Casino, Paul Steelman, president and CEO of Paul Steelman Design Group (PSDG), beams at the prospects that lie ahead. The chief architect for the recently opened Sands has arrived in Macao to inspect recent additions to the building he designed and to address a group of fellow architects, among them leading names like Callisons and KPF (Kohn Pederson and Fox), who are eager to hear about the success of his latest project.

"And well they might. Steelman is one of the world's leading casino designers, having worked on over 80 casino and entertainment related projects in a career that spans nearly thirty years. The success of the Sands has made casino developers and other designers sit up and take notice.

"…The design of the Sands has undergone substantial changes since its first presentation, but fundamentally, the design concept is the same, says Steelman.

"…One of the fundamental differences in the design of the Sands is the layout, Steelman says. While casinos are usually planned to spread out, with gaming facilities developed horizontally and any hotel towers placed above them, the Sands breaks this rule and layers multiple gaming and entertainment facilities above one another.

"…Curving the spaces also adds interest and complexity to the design as the perspective of the occupants and their experience of the space is always changing as they move through the building, he says, and 'this makes the gaming area always their focus'.

"…In another departure from convention, external lighting has been allowed into the building. While most casinos block out any references that remind gamblers of the time, Steelman lets light in and combines it with special effects lighting and other digital effects to create different moods at different times of the day.

"…As well as moving away from thematic designs towards more fundamental principles, buildings here will be more sympathetic and incorporate local design elements and features related to its history as a Portuguese colony and being part of China, he says…"