Macau casino boom to continue
Earnings in Macau could overtake all of Las Vegas’ gaming venues within four years, according to credit-rating agency Standard and Poor’s (S&P). Gambling revenues in Macau have already outstripped the famous Las Vegas Strip.
“In the next three to four years, taking into account the growth differentials, we think Macau will overtake all of Las Vegas,” said Craig Parmelee, S&P managing director of ratings services.
However, despite the optimistic future for the tiny Chinese island, warnings of over-investment, foreign competition and poor infrastructure must be fully realised if the region is to continue on its bright path.
"We expect growth in Macau to remain in double digits for several years to come," said Mary Ellen Olson, S&P director of corporate infrastructure ratings.
"Its key advantage is that it draws its customers from the local region - China and Hong Kong. That is likely to insulate it against outside competition,” she added.
It is estimated that casino revenues in Macau will reach $6.4 billion for 2006, an impressive growth rate of 15 per cent and above earnings on the Las Vegas Strip.
Macau has been incredibly successful in its desire to increase tourist numbers to the region, seeing tourist visits rising to 20 million for the first ten months of 2006. S&P also sees the Cotai Strip of Macau becoming the heart of the region.
"Take up will be slow to begin with for a new facility like this but we expect that with good management and on-time construction, Cotai will be a major milestone for operators," Olson said.
Since 2001 and Stanley Ho lost his gambling monopoly in the region, the island has attracted billions of foreign investment from the US from companies such as Las Vegas Sands, Wynn and MGM.
Editor, Jackpot.co.uk - 2007-01-16 12:07:51