Galaxy has bought its Cotai land bank from the government for MOP3 billion.  The Mystical Oasis property is currently being built on the site and is due to open towards the end of 2010.  DM sees this purchase as being more beneficial for Galaxy than it may appear, stating, “For less than it cost to build StarWorld on the peninsula, the group now has a secure land bank in what is likely to become one of the world’s hottest pieces of real estate for decades to come”.


Galaxy is developing The Mystical Oasis property, which will consist of two hotel towers of 1,500 rooms each, a massive gaming floor, and a few retail outlets.   The rest of the land will be given over to possible development of hotels, leisure facilities, and apartments.






Wealthy mainlanders are boosting Macau’s property sales.  Although there was a suspension of the city’s investment migration scheme two years ago, many of the people who were on the waiting list were still processed and approved since the suspension.  In 2007, 2008, and 1H09, there were 1,429, 1,852, and 1,185 approvals respectively.  Some commentators believe that the suspension has helped cool off the property market.


The SCMP story spurs DM to caution of the risks of investing in the gaming hub’s property market.  There are a lot of positive catalysts in the future; One Central is opening and there is excitement about LVS possibly selling its serviced apartment tower at the Four Seasons.


The cautionary point is that the long term in Macau is decidedly murky.  One anecdote that illustrates this point is the rumor that Concordia Industrial Park, on the edge of Cotai, will soon be rezoned to make way for a massive multi-tower residential development. Considering the possible restart of construction on the gigantic Windsor Arch development opposite the racecourse in Taipa, the overhang from One Grandtai on the ridge overlooking the Cotai Strip, you have to start wondering how many mainland property speculators there are out there who can sustainably support this takeoff yet again.





DM noted that the mass floors at LVS’ properties were packed during the month of August and that LVS gained MOP 100 million in mass revenues on a month-over-month basis.  SJM still made the most on mass – MOP 1.25 billion – but pays out much of that in commissions to third party non-Lisboa casino operators.  SJM’s hold was a mere 2.6%, after an even worse 2% in July.  MPEL gaming significantly in rolling-chip volume: up 20% compared to July.  Hold for MPEL was 3.1%. WYNN and Galaxy both saw improvements in VIP revenue while MGM was the only concessionaire to see VIP win drop month-over-month, albeit against a very strong July number.


DM sees little long term lessons to be taken from the August numbers but recognizes the paramount importance of luck (hold percentages) in the Macau operators’ results.





LVS closed its pre-IPO financing within days of saying that it was going to.  DM estimates that Venetian Macau Limited gained well over US$100 million in EBITDA for August and predicts that LVS will announce its earnings for the quarter ended 9/30 much earlier than is customary (six weeks). 





Wynn Resorts is said to be planning to raise up to US$ 1 billion by listing its Macau assets on the Hong Kong stock exchange.  A source revealed that the tentative listing date for the IPO is set for October 9 and that Wynn Macau will sell 20% of its enlarged share capital.


Some commentators see Wynn’s Hong Kong offering as being a more attractive option in Macau than LVS’ forthcoming IPO due to Wynn’s lower debt levels and strong brand name.





Henry Mong, the gambler who is as much as HK$30 million in debt to Wynn Resorts, is trying to block Wynn’s lawsuit by saying that Macau’s gaming laws require a credit contract to be ratified by the DCIJ.  Wynn is saying that the company can’t possibly do this on every credit agreement with every player and that the law was intended to cover credit agreements with junkets. 


DM hopes Wynn wins the case but wonders what that would do to the direct-VIP business.





Infrastructure projects are coming on line in Macau.  The new light rail system and the Pac On ferry terminal are both due to open towards the end of 2011.

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