GAME OF THRONES

2014/11/7

From：Macau Business Daily

The race for the leadership of the world’s gaming mecca is on. The biggest casino operators are putting on the ground massive numbers, massive projects and have massive expectations of what is labelled ‘Cotai 2.0’. Union Gaming says the largest 10 projects are on schedule, while some could miss the timeframe by a quarter or two. The total investment represents half of Macau’s GDP

It’s commonplace to say there’s a before and after for everything. For Macau and its gaming industry, the turning point is 2017 and Cotai 2.0, as it is known here, referring to the upcoming casino resorts that will open their doors within the next two years. The multibillion projects will reshape the face of the Macau casino industry and will more than double its size for what is already the world’s gaming mecca. Just when you think it couldn’t get bigger, it does.
The Cotai 2.0 race involves eight companies building 10 mega-projects featuring casinos, hotels, shopping malls and numerous other amenities with themes ranging from cinema (Studio City) to fashion (Louis XIII) to 18th Century Chinese porcelain vases (Wynn Palace).
The numbers are massive. In the next three years, casino operators will invest a total of US$22billion in new properties and extensions of current ones. The figure doesn’t take into account the millions spent on renovations for the existing resorts. The amount represents almost half of Macau’s GDP (US$53 billion). Wynn Macau is putting US$4 billion into its Wynn Palace, SJM more than US$3.9 billion for Lisboa Palace, while MGM, Sands China and Melco Crown are expected to spend over US$2.5 billion.
The Cotai ‘extravaganza’ will more than double the size of the gaming sector in Macau with the ardent hope of attracting a few more million tourists and gamblers, mainly from mainland China, of which it currently only captures 1 percent of the population. Macau receives an average of 30 million tourists per year.

On time… almost

According to a Union Gaming update on the pipeline of casinos here, by the end of 2017 Macau will have increased the number of hotel rooms by 51 percent, the number of tables by 62 percent and slot machines by 65 percent. Compared to what’s available today, the 10 casino resorts will add to the market an extra 15,000 rooms, 4,000 gaming tables and 8,000 slots. The US$100 billion market that investors believe Macau will be in 2020 is based on revenues generated by 42,000 hotel rooms, 9,200 tables and 21,000 slots.
The foundations of phase 2 of the world’s gaming mecca are already built and investors believe it will open doors per the predicted schedule. Only a few delays are expected. ‘As of today, we believe most projects remain on track with respect to management’s previously communicated guidance, although some could still slip by a quarter or two’, wrote Union Gaming this week.
With gaming revenues falling for the fifth straight month in October and the largest segment (VIP) plummeting 30 percent, investors and casino companies are expecting Cotai 2.0 to refuel the Macau success story and put the industry on the path to double digit growth.

Copyright@Macau Business Daily