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Galaxy Macau Opens Its Doors

Posted on May 17th, 2011

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Macau, the only location in the People’s Republic of China where gambling is legal, is witnessing a frenzy of construction of casino-resorts to bolster the position of the SRA as the world’s premier gambling destination. In the first four months of the year, gambling revenue for Macau reached almost $10 billion. By the end of 2011, Macau expects to generate 5 times the gambling revenue that Las Vegas will rake in. The Cotai Strip, a 5 square kilometer of reclaimed land between two islands, where the major casinos are locating recently saw the inauguration of Galaxy Macau, a casino-resort complex which boasts of 2,200 hotel rooms, 450 gambling tables and over 50 food and beverage outlets. It offers a network of swimming pools and the world’s largest Skytop wave pool, where guests can surf on waves 1.5 meters high. It also has a 2,000 sq. m. beach.

The ribbon cutting ceremony was graced by government dignitaries and Galaxy owners, among them: Deputy Commissioner of the Ministry of Affairs of the People’s Republic of China in the Macau SAR, Chairman of Galaxy Entertainment Group Dr Lui Che Woo, Vice Chairman of the Chinese People’s Political Consultative Conference Tung Chee-hwa, Chief Executive of the Macau SAR the Honorable Dr Fernando Chui Sai On, Vice Chairman of the Chinese People’s Political Consultative Conference Edmund Ho, Vice Chairman of Galaxy Entertainment Group Francis Lui, and representative of the Liason Office of the Central People’s Government in Macau Chang Yuxing.
Galaxy Macau is the latest jewel in the crown of the Galaxy Entertainment Group Ltd. – or GEG for short – which invested $2 billion in the casino complex. It is also the largest project the group has undertaken in terms of size and scope. The Galaxy Group, registered in the HK Stock Exchange, is controlled by the family of Dr. Lui Che Woo, founder of the K. Wah group, and founding chairman of the Hong Kong branch of the UK Institute of Quarrying. The company started, and became one of the largest players, in the Hong Kong construction business. In 2002 after securing a license to operate casinos in Macau, the group diversified into gambling. The GEG also owns the resort-casino Starworld on the Macau peninsula and City Club casinos, located in several hotels on the peninsula and Cotai.

The new casino-resort is part of the group’s strategy to reduce its reliance on the upscale gambling crowd, which usually involves so-called junket operators. These operators finance the high-rolling gamblers and guarantee payment of their debts to the casinos. In exchange, the junket operators charge the casinos substantial fees as their commission. With the emergence of an increasingly affluent Chinese middle class, Galaxy has fallen in line with the strategy of Macau to broaden the market base. This will not only ensure a more reliable and faster growing consumer market segment. It will also enable casino operators to realize more profits and, consequently, generate more revenues for the government.

Galaxy Macau expects to provide stiff competition for the Venetian Macao resort, said to be the world’s largest casino in floor area, situated in a nearby location. It is owned by the Las Vegas Sands Corp., which expects to complete a $4 billion expansion project right across the Venetian Macao within a year. The other big time operators which are ramping up their plans to construct casino-resorts in Cotai are Wynn Resorts Ltd., of Steve Wynn, and MGM Resorts International. Wynn expects to secure his land rights soon and open his resort by 2015. SJM Holdings Ltd. is also waiting for the issuance of its land rights. The company is owned by Stanley Ho, reputedly the territory’s gambling kingpin, and is the largest casino operator in terms of revenue. City of Dreams, owned by Melco Crown Entertainment Ltd., a Hong Kong-Australian joint venture, also operates three hotels in Cotai, and has recently experienced a strong uptick in its business.

To give it an edge over its competition, Galaxy Macau intends to focus on Asian tastes and preferences. Government statistics show that the overwhelming majority of visitors to Macau come from Asia. For starters, the resort claims to have the largest selection of Asian-inspired cuisine including delicacies from China (Yunnan, Guangdong, Xinjiang), Thailand, Vietnam, Malaysia, Taiwan and Japan. The complex is also the location of Singapore’s Banyan Tree Hotel & Resort and Japan’s Okura Hotel & Resort.