What happens when you propose a theme park in Macau and announce with much fanfare that it won’t have a casino—and then a casino operator with which you are intimately associated says it would quite like to build a project next to that theme park? Answer: you get an integrated gaming resort.
It looks like a beautifully Chinese solution to the problem of how to adapt to the (apparent) new Macau government policy of limiting gaming growth on Cotai while expanding leisure and tourism. By using a ‘grandmother’s footsteps’ approach to the issue, the parties involved (yes you guessed it, our old friends SJM) could get what others (i.e. foreigners) have been told they will have to wait their turn for.
This particular plot twist in the Macau soap opera began last month. It was then that Angela Leong, Dr Stanley Ho’s fourth consort and an SJM director (who incidentally increased her shareholding in SJM this week when Dr Ho transferred ownership of 7% of the company from his name to hers) announced plans to build a MOP 10.4 billion (USD1.3 billion) family-focused theme park on Cotai. The vehicle for this project—Macau Theme Park and Resort Ltd—has apparently already acquired a 200,000 square metre site next to the Macao Dome. So much for the new ‘transparent’ policies on land allocation supposedly enshrined in Macau’s new Land Law—the same ‘policies’ that could supposedly hold up Wynn and MGM’s Cotai projects because of the need to put their previously earmarked land out to public tender.
In addition to the plots known as Cotai 7 and 8 previously linked with Sands China that SJM coveted but was told this week it cannot have after all, SJM has also applied for a 70,000 sq. m. site next to the Macau Dome. It’s this site that could be ‘integrated’ with Angela Leong’s theme park.
“We are not a shareholder in the theme park development, but we did talk with Angela Leong, who is developing that theme park, to see if there is a synergy between the two plots of land,” Ambrose So, Chief Executive of SJM told journalists on Thursday.
Dr So didn’t mention the word ‘casino’ in relation to this potentially integrated site, but it seems the only logical reason for SJM to get involved.
SJM’s ambition for the site doesn’t stop there. Dr So told the Macau Daily Times last month that the company would like to incorporate the Macau Dome—a sports facility built for the East Asian Games in 2005 but something of a White Elephant since then—into its plans for the site. The Macau Dome was originally paid for with public money; i.e. by citizen taxpayers and by the casino operators (and indirectly the players, including citizens of China) that pay nearly 40% of the gross to the government in gaming tax). It will be interesting, therefore, to see whether SJM would want to have ownership of the Dome and the economic benefits of managing it transferred in full to SJM, or whether it would merely sit in the middle of the resort and continue to be publicly managed. If it’s the former, then one wonders how the valuation on the structure will be decided and how transparent that process will be.
For the record, Ms Leong’s portion of the project is due to have one 5-star, four 4-star and one 3-star hotels with a total of more than 6,000 guest rooms, shopping malls, convention facilities, an indoor beach and wave pool, amusement rides, a 4-D theatre (whatever that it), an equestrian centre, a horse carriage trail and a water sports centre.
