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Macao moves to rein in casino growth

23 April 2008

MACAU -- As reported by Reuters: "A move by the world's biggest gaming hub, Macau, to rein in breakneck casino growth should help established operators by shutting out aspiring rivals, but raises the spectre of Chinese government pressure for more restrictions.

"Macau Chief Executive Edmund Ho announced on Tuesday a freeze on new gaming licences and land allocations for new casinos, saying he was following Beijing's directives on the industry.

"The decision, which formalised what many have suspected, prompted share price jumps of 9.2 percent for Las Vegas Sands 7.4 percent for Wynn Resorts, with the U.S. firms seen cementing their places in a market where gaming revenues jumped 47 percent last year to $10.6 billion.

"...Daily revenue per gaming table in Macau has dropped to under $12,000 from $22,000 in 2002, when a four-decade monopoly owned by casino mogul Stanley Ho expired and other players, including U.S. operators, were allowed in.

"The former Portuguese-run enclave, whose gaming revenues overtook those of Las Vegas in late 2006, now has 29 casinos, run under three concessions and three more sub-concessions.

"But more than a dozen hotel, casino and retail operators are building on the Cotai Strip -- 4 sq km (1.5 sq miles) of reclaimed land fusing two islands -- with most due to open next year and in 2010.

"...Macau hopes its restrictions will encourage more investment by casino firms in non-gaming activities, such as retail and conventions. Such revenue accounts for about 20 percent of revenue for operators in Macau, against 60 percent in Las Vegas. But Davis Fong, a gaming expert at the University of Macau, said many casinos were just after fast gambling profits..."

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