By Farah Master
HONG KONG, April 26 Macau casino operator Galaxy
Entertainment Group Ltd said on Thursday it plans to
invest HK$16 billion ($2.06 billion) in the second phase of its
latest resort in the world's largest gambling destination.
Home-grown Asian casino companies are stepping up their game
and taking on Las Vegas gambling titans like Las Vegas Sands
and Wynn Resorts as they expand on their home
Galaxy, controlled by Hong Kong property and construction
businessman Lui Che Woo, said it plans to open the new phase by
mid-2015. The projected date is likely to make it the next
casino to open in the lucrative market and ahead of U.S.
rivals, including Wynn Macau and MGM China,
who are still awaiting government approval for their
The news comes just two weeks after Las Vegas mogul Sheldon
Adelson's Macau unit, Sands China Ltd, opened the
Sands Cotai Central casino a few hundred meters from Galaxy's
Armed with the biggest land-bank on Macau's developing Cotai
strip, Galaxy's current casino on the strip accounts for just 25
percent of its total allocated space. The new phase will double
Galaxy, which has a market capitalisation of $12 billion, is
planning to expand its capacity by up to 500 tables and more
than 1,000 slots with the new project.
Chief executive Francis Lui said the company had not yet
entered into a formal agreement with the government for the
number of tables, but he was confident it would be significantly
accretive to earnings.
Lui Che Woo, who is chairman of Galaxy, dismissed concerns
that labour would be a problem in constructing the new phase, a
problem that occurred in the rapid build-out of Macau a few
"In the next few years labour will be more abundant. In
2012, 2013 there are not that many new projects opening," he
Casino players in the gambling enclave are racing to
develop new properties to capture a larger slice of the Macau
market, where gamblers spent $33.5 billion last year compared to
Las Vegas, which took in $6 billion.
So far only Galaxy, Sands and Melco Crown
, have a presence on the emerging Cotai strip, a
reclaimed plot of land that the government is trying to develop
into a global tourism and leisure hub.
Galaxy, 12.6 percent owned by European private equity firm
Permira, will open two new luxury hotels, the Ritz-Carlton and
the world's largest JW Marriott, as part of the project.
It will also expand retail space to more than 100,000 square
meters and more than 200 luxury stores.
Robert Drake, chief financial officer, said no new equity
would be issued and the casino would be financed through
existing cash and debt.
Galaxy has already started construction and has 500 workers
at present. Its golden turreted property was the only one to
open in Macau last year, helping it to significantly increase
its market share over the past 12 months.
Galaxy Entertainment's shares were up 4.6 percent on
Thursday, outpacing a 0.5 percent gain in the benchmark Hong
Kong index. Its shares have gained more than 65 percent
so far this year.
An undisclosed institutional investor in Galaxy sold about
a $141 million stake in the company this week, a source familiar
with the matter told Reuters.
Macau, the only place where Chinese nationals are legally
allowed to gamble in casinos, said gambling revenue surged 24.4
percent in March to 25 billion patacas ($3.1 billion), in line