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Macau's Latest Casino Seeks to Diversify at the Tables
Beh Lih Yi | May 15, 2011

The $1.9 billion Galaxy opened with golden expectations. Macau had record gaming revenue of $23.5 billion last year, a far cry from the fading Las Vegas Strip as the US struggles to recover. (Bloomberg Photo) The $1.9 billion Galaxy opened with golden expectations. Macau had record gaming revenue of $23.5 billion last year, a far cry from the fading Las Vegas Strip as the US struggles to recover. (Bloomberg Photo)
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Macau. Macau’s newest casino opened its doors on Sunday with high hopes that it will lure visitors from across Asia, with analysts saying it will further boost growth in the world’s biggest gaming hub.

The Galaxy Macau, which cost around 14.9 billion Hong Kong dollars ($1.9 billion) and boasts 450 gaming tables, 1,100 slot machines and more than 2,200 hotel rooms, is the latest sign that gambling firms are betting large on the former Portuguese colony.

Macau hit a record $23.5 billion in gaming revenue last year, about 58 percent higher than 2009 and outpacing the Las Vegas Strip at least fourfold, according to analysts.

The Galaxy’s opening on Sunday comes days before the Sahara — an iconic Las Vegas hotel which hosted everyone from Elvis Presley and Jerry Lewis to Frank Sinatra and the Beatles in the 1950s and ’60s — closes its doors for the last time as the US gaming market continues to struggle.

“This is a golden opportunity for us to open Galaxy Macau, we are very confident,” Francis Lui, vice chairman of hotel operator Galaxy Entertainment Group, said on Sunday ahead of a grand opening ceremony.

“We hope it will welcome visitors not only from mainland China but those from Asia as well,” he said, calling the opening Macau’s “biggest event” this year.

Galaxy currently operates the luxury StarWorld Hotel and Casino plus several other casinos in the gaming boomtown, whose revenue is driven largely by the millions of mainland Chinese punters and high-rollers descending on it each year, thanks to the country’s surging economy.

But gaming operators in the territory have been aiming to polish Macau’s former image as Asia’s seedy gambling den, turning it into a Las Vegas-style family entertainment center, with a range of non-gaming options and resorts, such as Galaxy’s sprawling gold-tinted complex.

Lying on a 550,000-square-meter plot on the glitzy Cotai strip, the resort also boasts three posh hotels, a rooftop wave pool, manmade beach and over 50 food and beverage outlets.

The new casino-resort marks the first foray of two prominent hotel groups into Macau — Singapore’s Banyan Tree Hotels will run 250 suites and 10 floating villas, while Japan’s Okura Hotels & Resorts Worldwide will run 1,500 hotel rooms.

Galaxy is one of six firms licensed casinos in Macau, which was handed back to Beijing in 1999 and remains the only Chinese city where casino gambling is allowed.

Macau’s no-frills gaming scene was monopolized by tycoon Stanley Ho for decades before it opened to foreign competition in 2002.

Since then, a stream of Las Vegas-based gaming companies flooded into the southern Chinese city, hoping to cash in on what promised to be a massive market of visitors from Hong Kong and mainland China.

Macau’s leaders have also taken steps to prevent unrestrained casino expansion and encourage the city’s development as a cultural destination. The government last year announced it would withhold approval of new projects until 2013 and cap the number of gambling tables over the next few years.

Last year, more than 80 percent of the 25 million visitors to Macau were from Hong Kong and mainland China.

Analysts were skeptical about how big a role Galaxy would play in helping Macau diversify its economy.

“I don’t know that this is going to move the needle for the market in a big way to change that visitor base dramatically,” said Michael Paladino, an analyst at Fitch Ratings. “I think it’s largely going to remain a daytrip market.”

The Chinese government has expressed concern about the vast sums of money flowing into the city’s economy, while Macau officials have their own concerns about the region’s gambling-dependent economy.

That runaway growth has continued even as regional rivals including Singapore open glitzy new casinos to grab a chunk of the massive Asian market, which some experts predict will eclipse the US gaming sector in a few years.

AP, AFP