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Is Macau Going to cap Casino Activity
3/16/10 - Moves to restrict the involvement of more gambling companies in the booming gambling island of Macau could be in prospect, presenting existing licensees like Las Vegas Sands, MGM Mirage and Wynn Resorts with limited new competition.
Companies that have not yet entered the market could well be excluded if Macau chief executive Fernando Chui means business. Harrah's Entertainment, for one, could have some trouble establishing a presence in Macau.
Sands and Wynn have already capitalised on Macau's strength, completing initial public offerings of their assets in the area late last year. MGM is following in their footsteps, with plans to close its IPO by the third quarter 2010.
Chui said in a news conference Monday that he plans to set up a regulatory body to govern the future growth of the gambling industry, perhaps even taking back undeveloped land from land casinos if no proper plans are in place to build.
Chui did not specify a cap on table games, slots or the number of casinos, but said he intended to raise the gaming age limit to 21 from 17, but without setting a deadline. The official stressed the need for economic diversification on the island.
Macau has been the fastest growing market in the casino industry of late. In February, gaming revenue in the gambling hub surged 70 percent to $1.68 billion. The strong growth and future potential ensure that investors remain interested in the island despite the restrictions.
"We still believe the government will do little in terms of specific measures to curtail...[it is] unlikely we will see dramatic shifts initially," David Bain, analyst at Sterne Agee, commented.
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