Macau may regain land promised to casino operators

Four casino companies – Las Vegas Sands, Wynn Resorts, MGM Mirage and Harrer Entertainment – in Nevada could be hit by the action of Macau’s top leader on Tuesday.

Macau Chief Executive Fernando Tsui said China’s Special Administrative Region would reclaim land promised to casino operators, and the site could be used for other development purposes. Cui, who has been working for less than three months, gave a public policy speech and commented to the media. The speech included two mindsets.

Some analysts and gaming company insiders have dismissed the comments as political. But others have told Las Vegas-based gaming operators they need to submit plans for casinos, mostly in Macau’s Kotai Streep district, or lose their venues, as they believe Tsui, who replaced Edmund Ho as Macau’s top government official in December, is slowing casino development.

Speaking to media after the prepared remarks, Chu said the government would follow all legal procedures to reclaim undeveloped land. “The whole process will be very transparent, but the land will have to be returned and some will be used as social housing,” Chui said.

Las Vegas Sands, which has three casinos in Macau, plans to resume development this summer on four Cotai Strip projects that were suspended under construction more than a year ago when the company faced financial difficulties. Las Vegas Sands has two other undeveloped Cotai Strip sites.

Win and MGM Mirage, which operate casinos in the Macau Peninsula region, have expressed interest in building a resort in Kotai Streep. Harrah’s doesn’t own one of Macau’s six game licenses, but spent $577.7 million to buy a golf course near Kotai Streep in 2007 in hopes that more game licenses would be issued. Chui did not mention increasing the number of casino operators in Macau.

Gary Pinge, a Hong Kong-based Macquarie securities game analyst, told investors that the Macau government wants to build a small residential development for the mid- to low-end market. The confiscated land could be used for that purpose.

“With the exception of already approved casino developments, any further applications for casinos will be strictly controlled,” Pinge said in a research note. “We believe the underlying message is that no more casinos will be built in Macau in the near future.”

Stern Age gaming analyst David Bain said casino company shareholders were concerned that “a new chief executive may be using certain language that needs to diversify or limit Macau’s growth.”

But the Chinese government may wait until Las Vegas Sands opens a $5.5 billion resort in Singapore next month before enacting a new gambling law, he said. Union Gaming Group principal Bill Lerner thought nervous investors looking for “explicit steps” to slow Macau’s game growth found some relief in Chui’s comments. 슬롯머신

Lerner said Beijing could reduce its annual growth rate in 2010 by taking steps to curb funding and visits to Macau. In 2009, Macau casinos raised $15.5 billion in gaming revenue, up 14 percent from 2008. However, gaming revenue rose 31 percent in 2008, following sales growth of 47 percent in 2007 and 23 percent in 2006. The only casino scheduled to open in Macau this year is Win’s $650 million encore project. Chui said Macau will allow new casinos as long as construction plans are approved.

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