Inside Asian Gaming

inside asian gaming september 2016 14 Francis Lui VICE CHAIRMAN Galaxy Entertainment Group Power 5,540 last 2 Score year Claims to fame Created a HK$100 billion-plus company from the ground up in a decade Largest Cotai land holdings of the six gaming concessions More than HK$50 billion in expansion on the drawing board in Macau Hengqin island presence with plans for a non-gaming IR 2 There is no gaming operator in Macau other than Sands China with the assets to make a greater impact on the territory’s future than Francis Lui’s Galaxy Entertainment Group. Galaxy has committed HK$100 billion to that future. It has spent more than HK$40 billion to date and it has the largest land bank on Cotai with a store of cash and liquid investments exceeding $11 billion to bring off the rest. Plans are to break ground this year on Galaxy Macau Phase 3, which will position the company as a major player in meetings and conventions. A fourth and final phase will begin taking shape in 2017. And real estate has been amassed on Hengqin Island for development of a non-gaming resort on the scale of Chimelong. At Galaxy Macau and its adjoining Broadway Macau, GEG has spent HK$43 billion to date to assemble a sparkling 3,700-room resort complex on Cotai that was first in the market to deliver on the natural synergies between luxury hotel brands – Okura, Banyan Tree, Ritz-Carlton – and the aspirations of the mainland Chinese consumer. The total package – now encompassing some 120 restaurants, bars and lounges, more than 200 shops, an expansive rooftop area with a white sand beach and wave pool and water- themed amusement rides – finds the company five years into its investment ensconced as the market leader in VIP and possessing the scale and diversity to ensure it stays aligned with Macau’s evolution as a tourist destination for the masses. Best-known as a purveyor to the high end, GEG is pivoting skillfully with the collapse in VIP demand orchestrated by Beijing to build up its share of citywide mass gaming revenue to record levels. This is thanks to the steady ramp-up of 2015’s Galaxy Macau Phase 2 expansion and a skillful repositioning of StarWorld that has seen mass table drop at the resort on the Macau peninsula soar by double- digits this year. Significantly, the company also has achieved the cost cuts it budgeted for the entire year, HK$800 million worth, with no discernible impact on its vaunted service levels, and it expects to realize HK$300 million more before 2016 is over. What all this speaks to is planning and execution of the highest order. These have been the hallmarks of Mr Lui’s administration. What’s unique about that is the 61-year-old scion of Hong Kong construction magnate Lui Che Woo was educated as a civil and structural engineer, not a gambling operator. But the family was extremely prudent in its approach to entering Macau, partnering initially with Las Vegas Sands then taking a full two years to learn all it could as licensor of the City Clubs casino group before taking the plunge with StarWorld as both operator and owner. Clearly, Mr Lui is making the most of his schooling. When Macau does finally rebound, maybe sooner rather than later if August’s return to the black is any indicator after 26 straight months of year-on-year declines, Mr Lui and co will be there with the depth and quality of product to pursue an oversized share. Asian Gaming POWER 50 2 0 1 6