Land in Macau is Changing Gambling
Four of Nevada’s top casino companies — Las Vegas Sands Corp., Wynn Resorts Ltd., MGM Mirage and Harrah’s Entertainment — could be hurt by a move made Tuesday by Macau’s top leader. Land that was once set aside for casino development is being considered for other purposes due to the struggling casino industry. Several analysts and gaming company insiders wrote off the comments as political posturing. But others thought Chui, who replaced Edmund Ho as Macau’s top government official in December, was looking to slow casino development, telling Las Vegas-based gaming operators they need to submit plans for the sites, predominately on Macau’s Cotai Strip region, or lose the locations.
“The whole process will be made very transparent, but the land has to be taken back and some of it will be used for social housing,” Chui said. Each of the Las Vegas companies may feel the impact differently. “Other than those casino developments already approved, any further applications for casinos will be tightly controlled,” Pinge said in a research note. “We believe that the underlying message is no further casinos will be built on Macau in the foreseeable future.”
Gaming analyst David Bain said casino company shareholders are concerned “the new chief executive may be utilizing some specific language about needing to diversify or cap the growth in Macau.” Macau casinos, while up for the year, do not show the same size gains seen in past years. In 2009, Macau casinos collected $15.5 billion in gaming revenues, a 14 percent increase over 2008. However, 2008 had a 31 percent increase in gaming revenues following revenue growth of 47 percent in 2007 and 23 percent in 2006. Only one of the original four casinos is still scheduled to open in Macau this year, Wynn’s $650 million Encore project. Chui said Macau would allow new casinos as long as construction plans had been approved. “Apart from those we have agreed in principle in the past, in construction and those already approved, we will regulate (the building of new casinos) in the future,” Chui said . “We can’t think of a better place to build it, all things considered, namely the work force and government policy,” Wynn said. “We are constrained by the political process itself of getting the entitlements and the details done through planning and public works in Macau. We’re full tilt at that and our own planning process.”
