oreign gambling giants are still pouring billions of dollars into new projects in anticipation of continued growth and wealth expansion in China. Macau casino revenue growth is seven times that of the Las Vegas Strip. The Las Vegas Strip generated us$5.8 billion from January to November, whereas in Macau for the same period growth came in at us$ 41 billion.
Casino operators including Sands China and Galaxy Entertainment Group have been adding hotel rooms, shopping malls and entertainment shows to draw Chinese tourists, who accounted for more than 60 percent of Macau’s arrivals and have helped fuel a boom in the country’s only city where casinos are legal. Growth will probably slow this year in the absence of new resort openings, according to Bloomberg Industries.
“It’s going to be another strong year in 2014, while the growth rate is likely to be in mid-teens,” Grant Govertsen, a Macau, China-based analyst at Union Gaming Group, said by phone today. “In absolute terms, it’s going to be magnificent growth because of the improved rail connection and infrastructure, as well as the addition of the Chimelong theme park on the neighboring Hengqin island.”
Galaxy Entertainment’s Deputy Chairman Francis Lui expects casino revenue to rise as much as 20 percent in 2014, he said in an interview in November. MGM China Holding CEO’s, Grant Bowie said last month he expects revenue growth to be “in the low teens” this year as the industry has a higher comparison base.
Macau, a former Portuguese enclave, drew more than 17 million Chinese tourists in the first 11 months with 1.56 million coming in November, the highest for the month in at least six years, according to data compiled by Bloomberg Industries.
Galaxy Entertainment more than doubled last year in Hong Kong trading, helping make billionaire founder Lui Che-woo Asia’s second-richest person. He had a net worth of us$26.1 billion, according to Bloomberg Billionaires Index.
Galaxy Entertainment, which owns 2 million square meters of land in Macau, is the second-largest casino operator in Macau by revenue. The real estate is enough to quadruple its footprint, according to DS Kim, a Hong Kong-based analyst at BNP Paribas. The Hong Kong-based company had a 19 percent market share in November, compared with 23 percent for SJM, founded by 92-year-old casino mogul Stanley Ho, according to Citigroup Sands China, which has the biggest gambling resorts on Cotai, ranked third with a 22 percent share.