Galaxy to Spend Up to HK$60 Billion in Casino Expansion
Galaxy Entertainment Group Ltd. (27), the Macau casino operator founded by billionaire Lui Che Woo, plans to spend as much as HK$60 billion ($7.7 billion) to expand operations on the increasingly popular Cotai strip.
The company will spend the money on the third and fourth phases of Galaxy Macau, its flagship casino resort in Cotai that opened in May 2011, Chief Financial Officer Robert Drake said in an interview yesterday. Galaxy has said it will start construction of the two phases as early as the end of this year and begin operations gradually from 2016 through 2018.
Galaxy is competing with companies such as Sands China Ltd. (1928) to expand in Cotai, the equivalent of Las Vegas strip in Asia. It bought the Grand Waldo casino hotel in the area this month to widen its footprint there as an increase in new attractions, hotel supply as well as an improved rail connection are drawing more mainland Chinese visitors to the world?s biggest gambling hub.
Drake expects 2013 casino revenue for the city to increase ?mid-teens,? while VIP revenue will expand by ?high single digit,? he said.
Momentum for the city?s VIP market will continue for the rest of the year and casino revenue is expected to exceed $40 billion this year, Sands China Chief Financial Officer Ben Toh said at a gambling conference in Macau today.
SJM Holdings Ltd. (880)? s Chief Financial Officer Bob McBain expects gambling revenue to double from current levels in 6-7 years, he said separately at the conference today.
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Source: Vinicy Chan (2013). Galaxy to Spend Up to HK$60 Billion in Casino Expansion, Bloomberg Businessweek?http://www.businessweek.com/news/2013-05-21/galaxy-to-invest-up-to-hk-60-billion-in-cotai-casino-expansion published May 22, 2013. Viewed May 23, 2013,