The final fit-out of James Packer’s $US2.1 billion ($3.03 billion) Macau casino and hotel project has begun after construction ended on Monday.
The City of Dreams casino is due to open in the first week of June, provided several local authorities give Packer’s joint-venture company, Melco Crown Entertainment, an occupancy permit for the site.
Mr Packer is relying on the success of City of Dreams to vindicate his decision to invest billions of dollars of his own and Crown shareholders’ funds in the venture. The 1400-room hotel and 500-table casino will be the second casino in the Chinese special administrative region for the Nasdaq-listed Melco Crown.
It is hoped it will help the company win back some of the 10 per cent market share its Crown Macau casino has lost to rivals in the past year. Melco Crown was trading at $US12.69 a year ago. It is now trading at $US3.28.
City of Dreams has experienced construction cost blow-outs and difficult gaming conditions as gambling revenues and hotel revenues fall.
The ailing Chinese economy and government restrictions on the number of visits its citizens can make have hampered growth. Chinese who visit Macau mostly gamble on credit, using so-called junket operators because they can only take 20,000-yuan ($US3000) plus $US5000 with them.
The company warned it may not be able to recover all of the generous loans it makes to its mostly Chinese VIP gamblers.
“Aggressive enforcement actions against a customer [may] unduly alienate the customer and cause the customer to cease playing at our casinos,” it states.
