At one time Chinese billionaire Stanley Ho owned the casino business in Macau. But after the Chinese government extended licenses to outside operators such as Las Vegas Sands (NYSE:LVS) and MGM Mirage (NYSE:MGM), Ho's Sociedad de Jogod de Macau (SJM) casinos have dropped to 63% of the market, much of the loss in the high-roller segment. JPMorgan forecasts SJM's share will drop to about 25% within three years. Although SJM owns 17 casinos in Macau, many are aged, run down, and away from the center of development for the coming mega-casinos on the Cotai Strip. Now Ho has struck back with his biggest, most opulent casino, the almost $400 million Grand Lisboa Hotel. The ostentatious design, even by casino standards, was inspired by the Faberge egg and built in the form of a golden lotus flower topped with long, frond-like plumes.
The magnitude of the project, while huge in comparison with Ho's earlier casinos, pales in the light of the Galaxy Entertainment's planned Coati Mega Resort, Melco PBL's Crown Macau, the Sands' Macau Venetian Casino Resort and whatever the Virgin Group decides to do with the 20 hectares
2006's lush returns only hastened development projects in Macau, but with all the huge investments underway, one has to wonder if the customer base will expand quickly enough to pay off. While new investors offer the glitzy, modern facilities, Ho's fortunes are tied to aged properties. Will the Grand Lisboa be enough to keep him in the game?
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Reader Comments (Page 1 of 1)
2-13-2007 @ 5:45AM
steve said...
Virgin is acquiring 20 hectares not 20 acres. That's about 50 acres.
2-13-2007 @ 5:47AM
Tom Barlow said...
Thanks. Even more space to spread out, but not enough for a spaceport!
2-28-2007 @ 1:43PM
Tom Clemmer said...
Ho said something to the effect of - when the water rises - all boats will rise. Ho thinks that Macau will pull in 10 Billion in the next year or two...
I'm more in the $15 billion-plus camp. Competition won't matter much as SJM is only one of six with a consession to operate in Macau. SJM/Galaxy will make money as will MGM, LVS, WYNN, and MelcoPBL as nobody else gets to operate in Macau.
2-13-2007 @ 7:50PM
Tom Barlow said...
MGM Paradise announced another large new development plan today. The pace of business has become frantic. Do you see Singapore impacting Macau at all?