Galaxy Entertainment Set To Diversify In Macau After Chinese Crackdown
The ongoing crackdown on corruption by the Chinese Government in Macau seems to be more than just a political stunt. As we have reported, Macau gaming revenues have been hit hard in the last six months with record losses never seen in the last decade. The crackdown by the Chinese officials in the most lucrative gambling hub in the world has got many casino companies looking for alternative sources of revenues.
The declared aim of the Chinese is to ensure that Macau becomes less dependent on casino revenues alone and more diversified in order to sustain long term growth. Taking heed of the warning signs Galaxy Entertainment Group headed by chairman Lui Che Woo have announced that they will be doubling their investment to $12.90 billion in its integrated resort in Macau.
Company vice chairman Francis Lui explained their reasoning behind them diversifying their investments,” The current message from the central government and the Macau government (for the industry) is to develop other business alongside gaming. We have the largest land bank and it’s to our advantage.”
Gaming companies are still reeling from their losses last year as Macau recorded losses for the first year since casinos were liberalized in 2001 by the Beijing. Company president Michael Mecca expressed his optimism at the new plan aimed at extending their reach beyond just casinos,” We’re going through a consolidation but we’re quite confident that we can emerge as a much stronger market in general… and a much stronger company that actually strengthens the market by offering more non-gaming amenities,”
In related news Sheldon Adelson himself will be taking over as CEO of Sands China in order to personally handle the record slumps in gaming revenues. Macau makes up about two thirds of Las Vegas Sands’s revenues and has been hit hard by China’s anti-graft campaign.