One of the joint venture partners in the USD2.1 billion Macau gaming resort City of Dreams says the venue will open in June.
Crown Ltd, the Australia-based casino company with a 37.8 percent stake in the JV that will operate the site, revealed the timing to Australian journalists last week.
Officially the JV itself, Melco Crown Entertainment (MPEL), is still sticking to the more generalised statement ‘first half of 2009’. Perhaps it’s worried launch preparations will carry over to 1st July.
Crown Ltd certainly has pressing need to give some specific good news to investors and the Australian media. The personal wealth of Crown’s chairman James Packer is estimated to have halved in less than four years—from AUD7 billion in 2005 to AUD3.5 billion today, reflecting a collapse in global assets in general and in some gaming assets in particular. A number of equity investments in North American casino companies, including USD150 million for a 2.5 percent stake in Harrah’s Entertainment, were with hindsight bought at the very top of the market, and have now virtually been written off.
MPEL’s first and currently only Macau property, Crown Macau, turned a USD46.2 million operating profit last year, but costs associated with City of Dreams helped push the JV to a net loss of USD2.5 million. Crown Macau, aimed primarily at Macau’s VIP baccarat market (which last year accounted for 68 percent of all Macau casino revenues), is also facing pressure from a contracting high roller market during the global credit crisis and a likely government cap on rolling chip commission rates in VIP gambling rooms. Crown Macau’s 1.35 percent commission offer launched in December 2007 after a deal with the Hong Kong-listed junket agent consolidator Amax Entertainment Holdings helped Crown Macau grab 18 percent of the entire Macau market for VIP gaming at one stage in the first half of 2008.
