Casino Operators Benefit from New Macau Regs - 04-26-08

April 26 - When the Macau Chief Executive, Edmund Ho, announced plans this week to introduce tough new regulations to the peninsula's existing gambling industry, the news was met with cheer by the area's six existing operators, among them Las Vegas Sands Corp and the Galaxy Entertainment Group Limited, owned by Hong Kong tycoon, Lui Che-Woo.

Ho's decision will essentially block the expansion of existing Macau casinos by capping the number of gaming tables and slot machines approved by the administration, as well as halt the approving of land for any new projects in the pipeline. Projects that have already been approved will not be affected by the decision.

A US business analyst said of the decision: "It's good for Macau. Having an orderly way to grow and putting some rules in place - it's all good for the existing operators."

Since the Chinese government put a stop to the forty year gambling monopoly on the area, held by Stanley Ho, in 2002, the number of casinos in the area has doubled to nearly thirty.

Meanwhile, it was announced that shares of casino operators in Macau climbed significantly on Tuesday after the announcement. Las Vegas Sands Corp shares jumped 9.2% to $71.00, while MGM Mirage's stock rose to $50.73, an increase of 3.4%.

Companies who are trying to gain a foothold in the Macau market may come out disappointed from the news. Harrah's Entertainment is yet to secure a license and its plans to rezone a golf course that was purchased by a subsidiary last year may be dashed with Edmund Ho's decision. A spokeswoman for the company, however, said that Harrah's plans "to run a first-class golf course in Macau have not changed."

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