Analysis | Macau warned as Chinese tycoons invest in Australia’s massive casino, local investors investigate

A new reality is facing the Macau gaming industry. Just as long-­awaited signs of market stabilization have appeared, the MSAR’s rivals have become increasingly willing to spend all it takes to lure away the affluent Chinese players that have been playing a massive role in the town’s success.
“Times might be improving for Macau, but the challenges keep growing every day,” an analyst from World Gaming wrote yesterday.
According to an Australian newspaper report published over the weekend, Hong Kong tycoon Tony Fung’s ambitious Aquis Great Barrier Reef casino project, located near the tropical city of Cairns, looks set to become a reality after Chinese construction giants Tandellen and CCCC International Holdings agreed to provide financial backing.
Aside from Aquis – the most expensive casino complex ever built at USD8 billion – the island of Saipan in the Western Pacific Ocean has promised a USD7-billion development, while the gaming tycoon Sheldon Adelson has indicated he will spend USD10 billion when given a license to build Japan’s first casino.
Meanwhile, shares of the six local casino operators have risen an average of 30 percent over the past two months, while Wynn surged almost 60 percent in January. Nevertheless, these stocks still remain nearly 70 percent below their highest peaks.
Preliminary figures show that the downtrend will resume this month, with analysts saying that gross gambling revenue is set to fall 15 to 20 percent.
A Wall Street Journal op-ed criticized one part of China’s five-year economic plan, which was to develop Macau into a “global tourism center” in the hope that Beijing could flood casinos in Asia’s Las Vegas with more gamblers.
The WSJ reckons that the belief is “misguided at best,” since China’s anti-corruption crackdown remains a strong factor driving cashed-up clients away from Macau.
Shifting money to Macau and then out of China has become more difficult in view of intensifying capital outflows, the WSJ report indicated.
Meanwhile, in contrast to the downturn of the gaming industry, local gaming investors are among the shortlisted bidders for the acquisition of a casino resort in Laos, the Savan Vegas Hotel and Entertainment Complex, according to a report by GGRAsia.
The six firms shortlisted as candidates include Iao Kun Group Holding Co Ltd, a Nasdaq-listed investor in casino junket room operations in Macau and Australia; Macau Legend Development Ltd, a Hong Kong-listed casino services firm with casino operations in Macau and plans to build a casino resort in Cape Verde; and a consortium involving RGB (Macau) Ltd, a firm that has previously managed a slot machine operation at L’Arc, a casino hotel under the gaming license of SJM Holdings Ltd.
The Laos government had approved the list based on the inclusion of “information on financial capability and operational expertise.”
The property in Savannakhet – a Laos province that shares borders with Thailand, which bans casino gambling, and Vietnam, which forbids locals from playing in casinos – includes a “full service casino, a hotel and numerous entertainment and leisure offerings.”
At the same time, major properties are being operated and/or developed in South East Asia and Russia – all looking to lure the Chinese patron. Staff reporter