Inside Asian Gaming

INSIDE ASIAN GAMING | June 2010 8 on-year to 4,261,467 in the first four months of 2010. In appearance, Cotai still has a raw, unfinished look—rather like those vintage photographs of Hollywood from the early 1920s. Cotai doesn’t yet have the ‘stickability’ of the Las Vegas Strip in terms of offering a place for people to stroll and take in the sights and the lights. That’s what Dr Ambrose So, the Chief Executive of Stanley Ho’s casino operating company SJM, meant earlier this year when he told Inside Asian Gaming that Cotai doesn’t yet have “critical mass”. SJM has been adopting a ‘wait and see’ approach to Cotai. It doesn’t currently have any land gazetted for casino use there, but there is a piece of land on Cotai that if developed will depend on a gaming sub licence purchased from SJM. That’s the MGM site to the east of the Strip behind Sands China’s plots five and six. SJM—no foothold SJM itself was supposed to have had land on Cotai at a rock bottom price following a land swap deal in 2006. In the deal, the Macau government indicated it would allow ShunTakHoldings—a shipping andproperty conglomerate providing most of the ferry services from Hong Kong to Macau that Pansy Ho leads as Managing Director and Dr Ho chairs—to exchange a 1.1 million square feet piece of land it acquired in Taipa in 2002 for a plot on Cotai by paying HK$500 million. Following the arrest, trial and imprisonment for corruption of Ao Man-long, a former Macau secretary for transport and public works, land swap deals went out of fashion in Macau, and public tender for land sales at going market rates became all the rage. SJM was pretty vague in its IPO prospectus in 2008 regarding its plans for Cotai, referring only to “preliminary plans for two mixed— use developments”. billion. That’s only 16.5% of the US$14.9 billion gross gaming revenues recorded by Macau as a whole in 2009. (CoD only opened in June that year.) Given theVIP-skewed nature of Macau’s gaming market, a more reliable indicator of the business health of Cotai may be the numbers of people arriving from mainland China via the Lotus Bridge, just a few hundred yards from The Venetian, and via the Pac On Ferry Terminal at neighbouring Taipa. In the first four months of 2010, arrivals to the Taipa ferry terminal rose 24.9% to 1,107,183, according to DSEC, the territory’s Statistics and Census Service. By contrast, arrivals by ferry to the Outer Harbour next door to Casino Oceanus on Macau peninsula rose by only 4.6% during the period to 2,160,671. Visitor arrivals by land (including the Border Gate on Macau peninsula as well as the Lotus Bridge) increased by 13.9% year- Cover Story A bout the nearest thing to a Cotai Strip ‘stroll’ at the moment is the short walk from City of Dreams, Melco Crown Entertainment’s resort on the north eastern side of the Cotai Strip, due west across the Strip, to the Campanile tower ofTheVenetian Macao. It’s only recently that a pedestrian crossing was added to that part of the Strip. Previously, walkers took a chance dodging six lanes of traffic populated by Macau’s sometimes erratically driven taxis and minibuses. A big part of the reason for the lack of ‘strollability’is that around half of Cotai is still a giant building site. ‘Cotai 1.0’ would have been at or near completion were it not for the global credit crisis of late 2008. That led to Galaxy Entertainment Group mothballing Cotai—the Building Site It’s still a little rough around the edges Cotai Version 1.0 (2007 to present) Four Seasons Hotel Macao City of Dreams (MPEL) The Venetian Macao US$1.05 billion August 2008 US$2.4 billion June 2009 US$2.4 billion August 2007 Cost Opening Date 120 400 870 No. of Gaming Tables 200 1,300 3,400 No. of Slots Plaza Casino 70,000 CoD Casino and Hard Rock Casino 420,000 Casino area (including Paiza Club) 550,000 Casino Area (sq. ft) Four Seasons Crown Towers, Hard Rock, Grand Hyatt Venetian Hotel Brands 276 rooms and 84 suites 2,200 3,000 No. of Hotel Rooms The Shoppes at Four Seasons 211,000 175,000 Grand Canal Shoppes 1.6 million Retail Space (sq. ft) 27,500 Grand Hyatt Ballroom 215,000 Cotai Expo® 1.2 million Convention Space (sq. ft) N/A The Bubble 360-degree audiovisual show Cotai™ Arena 15,000 capacity Arena N/A Theater of Dreams 2,000 seats ZAİA™ Theater 1,800 capacity Theatre