HONG KONG, Aug 19 (Reuters) - Macau casino operator Galaxy Entertainment Group posted a 29 percent increase in first-half net profit, boosted by its flagship resort in the southern Chinese gambling hub.
Galaxy’s rise in profit comes as growth in Macau has begun to slide due to a slowing Chinese economy and a prolonged crackdown on corruption that has hit sentiment from wealthy Chinese patrons.
While gambling revenue in Macau wildly surpasses rival locales, raking in monthly revenues equal to around half of what Singapore and Las Vegas make annually, gambling revenues fell for a second consecutive month in July.
The fall, down 3.6 percent was due to lingering impact from the soccer World Cup that diverted massive bets away from the world’s largest gambling hub and the prolonged impact of Beijing’s anti-corruption campaign on the high roller VIP segment.
Galaxy, which competes with Sands China, Wynn Macau, Melco Crown, MGM Resorts and SJM Holdings, said net profit for second quarter was HK$6 billion ($774 million) from HK$4.6 billion a year earlier.
Operators have been impacted by higher labour costs for disgruntled casino workers becoming a costly thorn in Macau’s side.
Despite the negative headwinds for the industry in the short term, analysts view Galaxy positively as the $33 billion company is set to be the first casino to open a new resort in 2015 in Macau.
Controlled by the Hong Kong based Lui family, Galaxy is armed with the biggest land bank on Macau’s developing Cotai strip. The company’s current casino on the strip accounts for just 25 percent of its total allocated space.
Casino players in Macau, a former Portuguese colony, are racing to develop new properties to capture a larger slice of the Macau market, which raked in $45 billion last year.
$1 = 7.7628 Hong Kong dollars Reporting by Farah Master; Editing by Matt Driskill