Galaxy May Invest More Than $5 Billion in Japan, Taiwan Casinos
Galaxy Entertainment Group Ltd. (27), the Macau casino operator that made Lui Che-woo Asia’s third-richest man, may consider investing more than $5 billion in Japan and Taiwan, if those governments open their markets.
The Hong Kong-based company may spend more than HK$20 billion ($2.6 billion) in each of the Asian markets, Deputy Chairman Francis Lui, the eldest son of the billionaire, said in an interview in Macau yesterday.
“If we’re given the chance to build a casino in Japan or Taiwan, we would at least be spending HK$20 billion or HK$30 billion,” Lui said. “We have the financial capacity to do that.”
Galaxy joins competitors such as Wynn Resorts Ltd. (WYNN), MGM Resorts International and Las Vegas Sands Corp. (LVS) in seeking opportunities outside Macau. Tokyo’s selection to host the 2020 Olympics boosts confidence the government will legalize casinos in what could be the world’s second-largest gambling market after the Chinese city.
Japan has long been touted as an attractive gaming market with a large and relatively rich population base. The country may generate $10 billion revenue a year if it opens up, Union Gaming Group LLC estimated.
Galaxy also plans to invest HK$10 billion to develop leisure and sports facilities on Macau’s neighboring Hengqin Island. The investment includes the costs of land acquisition and construction. The island is being developed by local and international companies as an entertainment destination.
Chinese tourists have transformed Macau into the world’s largest gambling hub, boosting profits for the company and its rivals. Lui expects casino industry revenue to rise as much as 20 percent next year in the only city in China where casino gambling is legal, he said yesterday.
Casino revenue in the former Portuguese enclave rose 18 percent to 297.1 billion patacas ($37.2 billion) in the first 10 months of this year, close to 2012’s $38 billion in revenue. VIPs, or high rollers, account for about two-thirds of total turnover, which is six times bigger than the Las Vegas Strip.
Galaxy has 2 million square meters of land in Macau, the most among the six operators. The landbank enables it to quadruple its footprint in the Chinese city, according to DS Kim, a Hong Kong-based analyst at BNP Paribas.
The casino operator in July completed the HK$3.25 billion purchase of the Grand Waldo complex in Macau, which includes a spa and hotel, to increase its presence in Macau’s increasingly popular Cotai Strip, the Asian equivalent of the Las Vegas strip.
Shun Tak Holdings Ltd. (242), the property company founded by casino mogul Stanley Ho, earlier this year said it won a bid for a site in Hengqin and plans to build a hotel-to-office complex there. China designated Hengqin as a tourism, business and cultural zone, and a resort is under construction in the area, Shun Tak said then.
Lui Che-woo, the Galaxy chairman, has a net worth of $21.7 billion, making him Asia’s third-richest man, according to the Bloomberg Billionaires Index.
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