Chinese Officials Stops Casino License Approval In The Macau Enclave
Chinese officials stopped casino license approval in The Enclave of Macau. For the first quarter of this year Macau has $3.8 billion in gaming revenue compared to $1.2 billion from gamblers in Las Vegas, Nevada real estate. Last year Macau took $10.3 billion from gamblers.
Interesting Macau would do such a move based on their current revenue compared to Las Vegas gaming revenue.
Ed Ho this week told Chinese lawmakers to review the real estate development in the Macau gambling industry. No new casino concessions will be made but this will not affect current projects. Current resorts hope this could stop competition.
Junket operators will be hard hit by the license approval halt. Commissions could fall to levels that would become unprofitable to operate.
Three local Las Vegas gaming companies who have a presence in Macau include MGM Mirage, Las Vegas Sands Corp. and Wynn Resorts.
Harrah’s has a golf course in Macau and wanted to a casino license. With the new ruling they would need to purchase an existing casino in order to enter the market. Last year’s buyout put Harrah’s $17 billion in debt and would make such a move extremely unlikely.
The economic boom to Macau is due to the close six hour flight proximity of about 2 billion people in Asian countries. They also have a large disposable income. The destination has become so popular that 25 million travelers visit annually.
Ed Ho fears current business conditions could lead to future problems including too fast growth. He wants a sustained business growth with sound business practices.
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Chinese officials stops casino license approval in the Macau Enclave.