Asia’s Second-Richest Lui plan to expand in US

“What can I do if I retire, watch the sun rise and set?” said the chairman of Galaxy Entertainment Group, who first made his fortune in construction and also owns 13 hotels in the U.S., including seven Hiltons. “I want to do something meaningful. I don’t want to just sit there waiting to die.”
 
Lui, Meanwhile, Galaxy, which is spending about US$10 billion to expand its gambling resort in the former Portuguese colony, may also invest us$1.3 billion in nearby Hengqin island, said Lui. He also plans to set up a charity to build schools in China.
 
Galaxy runs six out of 35 casinos in Macau, where casino revenue surged 19 percent to $45 billion last year, about seven times that of the Las Vegas Strip. After a more than sixfold increase in net income in the three years through 2012, the company seeks to repeat its success outside Macau, where the industry faces land and labor constraints in a city about half the size of Manhattan.
 
Lui’s net worth has risen to $23 billion, anchored by his family’s 51 percent stake in Galaxy, according to the Bloomberg Billionaires Index. Galaxy’s share price more than doubled last year in Hong Kong trading, beating the benchmark Hang Seng Index’s 2.9 percent advance. Galaxy would consider investing at least us$2.6 billion in Japan or Taiwan each if those markets open up, Lui’s eldest son Francis, who runs the company as deputy chairman, said in November.
 
Business leaders including Lawson Inc. Chief Executive Officer Takeshi Niinami are forming a group backing casinos in Japan, and Osaka Prefecture Governor Ichiro Matsui this month said their legalization is “just a matter of time.” Lawson is Japan’s second-biggest convenience-store chain.
 
To complement its casino business, Lui said Galaxy intends to build sports-related facilities and hotels in Hengqin, an island next to Macau that’s connected by bridge. He declined to discuss possible acquisition targets in the U.S.
 
In Macau, Galaxy is allowed to build a maximum floor area of 2 million square meters (21.5 million square feet) on the Cotai strip, the most among the city’s six casino operators. The company plans to quadruple the size of its existing Galaxy Macau resort on Cotai, Asia’s equivalent of the Las Vegas Strip, by 2018. The company’s net income for last year was probably HK$9.93 billion, according to the average of 20 analysts’ estimates compiled by Bloomberg, 35 percent more than in 2012.
 
Lui’s Galaxy Macau opened in May 2011 with more than 2,000 hotel rooms. The company is spending HK$20 billion on its second phase, due to open next year, with as much as HK$60 billion more earmarked for the third and fourth phases.
 
While his StarWorld, opened in 2006, caters to high rollers who typically wager us$1 million per visit and veteran gamblers who eschew the frills in other casinos, Lui says he now sees greater potential in China’s rising middle class.