The Wynn Macau has a mechanical dragon, the Galaxy Macau has a huge wave pool, and the Venetian Macau has, well, Venice.
The next wave of casinos in Asia's gambling capital will even have a replica of the Eiffel Tower while the ultra-luxury Louis XIII hotel will have a giant diamond encrusted in the roof.
But for now, SJM, Macau's only home-grown casino group – founded by tycoon Stanley Ho – has to make do with golden shovels.
Thursday saw the groundbreaking ceremony for the company’s first casino resort on the Cotai Strip – Lisboa Palace – which is due to open in 2017.
SJM said it will cost HK$30 billion to build but that it has about HK$20 billion in cash and operating cashflow of HK$7 billion to HK$8 billion, making a fund-raising trip to capital markets unnecessary.
In case there was ever any doubt, Ambrose So, chief executive of SJM, moved to reassure the reporters gathered that it was not to be confused with the Wynn Palace being built next door. “Wynn is Wynn, this is Lisboa, so there will be no confusion. If you tell the taxi driver you want to go to Lisboa Palace they wont take you to Wynn Palace, and vice-versa,” he said.
The comment was timely because the six gaming groups that dominate Macau face a growing battle for customers; a demographic that up until recently seemed simple, in that they were just gamblers.
Now, however, the government of Macau is pushing hard to reduce the economy’s reliance on gambling and gaming.
“The government has indicated table allocation will depend on non-gaming offerings but no clear metric has been provided,” analysts at Nomura said in a recent report.
Macau's six principal casino groups – Wynn Macau, Galaxy Entertainment, MGM China, Sands China, SJM and Melco – have introduced, to varying degrees, alternative streams of revenue, such as high-end restaurants and luxury goods shops. Some have even re-configured their casino complexes as leisure destinations, such as the Galaxy Macau, which contains a cinema and a large swimming pool.
The stakes in this push for greater diversification are huge because the rewards from operating in Macau have to date been so high. It is widely known that Macau’s gaming revenues outstrip those of Las Vegas by a factor of six.
But how far can growth continue? Macau’s gaming sector revenue grew 7% in January to US$3.6 million but the year-on-year growth was the lowest in 14 months and missed analysts’ expectations of 11%-15% growth.
The gaming revenue growth seen in January was the slowest for 14 months.
Visitor boom
