The Australian Financial Review has reported that the PBL Melco Joint Venture led by James Packer and Edward Ho is planning an initial public offering later this year to fund further expansion in Macau. Last week the joint venture acquired land for a third casino project and the Macau Daily News has published a report that there are ongoing talks for the purchase of adjacent land to double the size of the site. The IPO will be subject to regulatory approval by the Macau government of the casino sub concession purchased from Wynn Resorts for US$900 million.

The planned Nasdaq IPO, as yet unconfirmed, selling 20% of PBL Melco could be expected to raise US$1 billion to fund further expansion in Macau and Asia. The joint venture has Crown Macau due to open next year in the Taipa area and ground was broken last month on the City of Dreams on the Cotai Strip. The third casino project is for land close to Stanley Ho’s famous Lisboa Casno in central Macau. The companies may also seek gaming opportunities in countries such as Thailand, Taiwan and Japan. Melco shares in Hong Kong and PBL shares in Sydney rose on the news of the planned IPO.

Recent official figures from Macau show a 15.7% year on year rise of gaming tax revenue to US$763 million for the first four months of 2006 and visitor numbers rose over 19%. The vast majority of visitors came from mainland China, and Macau expects that the increasingly affluent Chinese will continue to come to gamble in the only place in the country where the activity is legal. Over three-quarters of the Macau Government revenue comes from gaming taxes. Macau is forecast to overtake Las Vegas in gaming revenue this year. (E-05.24.06)

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