The Melco International and PBL joint venture is spending mega bucks in Macau, reportedly US$412 million this year. Projects include Crown Macau on Taipa Island, City of Dreams in Cotai, and Mocha slots halls, of which there are six at present. The JV may now seek a separate listing for its City of Dreams complex in order to raise funds for construction.

City of Dreams is the flagship project and has already had plans scrapped for an underwater casino. Crown Macau, scheduled to open early next year, has halved its number of projected slot machines to around 500. This comes after daily machine revenue at the Mocha slots halls has recently fallen. Two or three more halls are expected to open during the course of the year, raising Mocha machine numbers to around 1,500.

Macau and Hong Kong banks agreed in February to loan Melco PBL Entertainment money for construction of the US$193.3 million Crown Macau hotel casino. The City of Dreams is expected to open in phases from the end of 2008. Construction costs in Macau have risen appreciably lately and shortages of workers in both the construction and gaming industries are envisaged. As living costs surge some locals are leaving for mainland China. However, casino profits continue to rise.

The gambling scene in the Las Vegas of the East is very different from that in the original. Machines make 75% of casino revenue in Las Vegas and only a small contribution in Macau. 75% of Macau gambling revenue comes from the high rollers and even starting bets are around 25 times higher than in Las Vegas. Macau’s casinos made US$6.8 billion in 2005 and visitor numbers rose by 12% to over 18 million. Whatever the cost of casino development, Macau still seems to be a good bet. (E-04.04.06)

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