Galaxy Entertainment Group Ltd., which last month opened Macau’s first new casino projects in three years, said gambling at its recent expansion has been weaker than expected.
Business at the second phase of Galaxy’s Cotai casino resort “is satisfactory, but not as good as what we expected,” billionaire Chairman Lui Che Woo told reporters in Hong Kong after the company’s annual general meeting, adding he expects further impact of its gaming business if the city allows a smoking ban to be extended to VIP rooms.
Several analysts slashed gaming revenue forecasts in the world’s largest gambling hub last week, citing figures in the first week of June that were poorer than they thought. They had looked to projects from Galaxy and future ones from operators such as Melco Crown Entertainment Ltd. to lift Macau out of the doldrums, after casinos there posted a yearlong losing streak and caused first half economic output to tumble 24.5 percent.
Shares of Galaxy retreated to 0.9 percent higher at HK$33.55 as of 1:45 p.m. in Hong Kong trading, after Lui’s comments. The shares had gained as much as 1.5 percent earlier. The Hong Kong-based operator started operations of the Galaxy Macau’s expansion and Broadway Macau on May 27.
The new project’s performance “will be better in the next one to two months,” said Galaxy Vice Chairman Francis Lui, adding he was happy with the performance of the non-gaming elements at its new properties such as its hotel bookings and dining outlets.
“Be patient, we believe the scale, facilities and services of the second phase are the best,” he said. Business should improve in July and August, compared with June which is an exam season for students, he added.
Still, Galaxy gained market share over other operators since its properties opened, marking Macau’s first new casino projects since 2012.
Galaxy increased its gross gaming revenue market share to 25 percent in the first 14 days of June, up from 19 percent in the whole of May, Barclays Plc analyst Phoebe Tse wrote in a note on Monday, overtaking previous market leader Sands China Ltd. which fell to second place with 22 percent share.