Two Way Hard Three | Las Vegas Casino & Design Blog

March 16, 2010

Macau To Regulate Building Of New Casinos

Posted by detroit1051

Macau's new Chief Executive, Fernando Chui, gave his first policy address March 16. He had been expected to announce stringent plans to slow the overheated gaming market in the Chinese region and announce steps to diversify Macau's economy. Gaming revenues increased almost 70% in the first two months of this year compared to 2009. Gambling accounts for about three-quarters of government revenue for Macau However, his comments appear to have resulted in a sigh of relief by major casino operators who already have a presence in Macau such as Wynn and Las Vegas Sands.

Reuters reports that Chui intends to limit the building of new casinos. This could help current operators' profits by protecting the market from oversupply of new casinos. Wall Street will give its opinion when the NYSE opens this morning.

To read Reuters:
Macau government to regulate the building of casinos

Wall Street Journal initial story (subscription may be requred):
Macau Gambling Industry Awaits Chui's Speech

Update: RJ's Howard Stutz weighs in.
Macau Curtailing New Casino Construction

Update #2: The market liked WYNN and LVS today. Wynn +4.48% and LVS +7.33%.


Categories: Business of Gaming, Macau Casinos and Hotels, Venetian/LV Sands, Wynn Resorts


Comments

Read archived comments (3 so far)
March 16, 2010 6:31 AM Posted by Brian Fey

I haven't read the details, but I'm 99.9% sure they will grandfather in certain properties like, Wynn Cotai? I'm sure Wynn wouldn't be up this morning if that weren't the case.

March 16, 2010 1:27 PM Posted by mungroo

Howard Stutz reports in the above-linked story that Wynn Resorts Ltd has not formally submitted its Cotai plans to the Macau government. The statements Steve Wynn made in the last earnings call made it sound like they had not completed the design yet.

Assuming WRL has not submitted its Cotai plans and therefore would not be "grandfathered", the announced policy on restricted casino development would seem to be a big problem for Wynn. In the last earnings call, Wynn asserted that Wynn Resorts Ltd. is now more of a Chinese company than an American company. The Macau govbernment announcement seems problematic for that strategy.

March 16, 2010 4:03 PM Posted by Brian Fey

Macau has already given Wynn approval to break ground, so I'm sure this won't be an issue. Wynn & Company has known this was coming for months now, I'm sure if they didn't have their butts covered, they would have already moved on the project.