VICE CHAIRMAN
Galaxy Entertainment Group
POWER SCORE: 3,510
POSITION LAST YEAR: 1
CLAIMS TO FAME
- Built Galaxy into Macau’s de facto local gaming champion
- Developing largest single land plot in Cotai, with Phase 3 expected to open in 2023
- Holds strategic stakes in Monte Carlo casino operator SBM and in Wynn Resorts
LIKE EVERY OPERATOR in Macau, Galaxy Entertainment Group (GEG) has felt the full force of the COVID-19 pandemic. From printing revenues of HK$51.9 billion (US$6.6 billion) and EBITDA of HK$16.5 billion (US$2.1 billion) in 2019, the group has endured two-and-a-half years of unprecedented hardship, with revenues falling to HK$12.9 billion (US$1.6 billion) in 2020, HK$19.7 billion (US$2.5 billion) in 2021 and HK$6.5 billion (US$828 million) in 1H22.
All three periods saw GEG record net losses – a scenario that seemed incomprehensible during pre-COVID times.
But despite such pandemic-induced headwinds, GEG has avoided the financial pitfalls faced by all five of its Macau concession peers thanks to a conservative fiscal policy focused on banking profits and minimizing debt. The result? GEG is the only concessionaire in a net cash position with cash and liquid investments of HK$29 billion (US$3.7 billion) and net cash of HK$20.3 billion (US$2.6 billion) as of 30 June 2022.
That the company should find itself in this position in 2022 – some 20 years after it was first granted a Macau gaming concession – is remarkable given that neither Vice Chairman Francis Lui nor his father and group Chairman Lui Che Woo had any real gaming experience when they began.
But with their local roots, they did possess real world knowledge of what the Chinese customer wanted. In an interview with Inside Asian Gaming back in 2011, Francis Lui explained, “It starts from knowing your customer well. I have been working in China since 1985, so I keep saying that if there is a person in Macau who understands what the Chinese customer will look like in the next five or ten years, it is probably somebody like me, who has been there doing business in China, seeing them evolving.”
GEG planted a flag in the ground with the opening of Waldo in 2004 and the hugely successful StarWorld two years later, but its star truly shone following the May 2011 launch of its Cotai integrated resort Galaxy Macau.
“The product was designed in such a way that we are not going to be obsolete in five or 10 years’ time,” Lui said of Galaxy Macau at its opening.
“If you look at some of the properties that have been built in Macau recently, some of them might have a problem five years in the future, especially the ones built with a more gaming-focused design. I think the customers will evolve so that they prefer a more integrated and wholesome experience.”
A decade later, GEG has completed a Phase 2 expansion of Galaxy Macau, is ready to launch Phase 3 once pandemic conditions allow and is already well underway in development of Phase 4. When complete and fully operational, Phases 3 and 4 will offer 3,000 hotel rooms and villas, 400,000 square feet of MICE space, a 16,000-seat multi-purpose arena, F&B, retail and more casino space – all in addition to the six major hotel brands, 120 food outlets and multiple other amenities that have already propelled the property to the top of Macau’s gaming tree.
With no company more certain of being granted a new 10-year concession by the Macau government this year and its Phase 3 expansion ready for liftoff as Chinese players return, GEG’s future – despite the pandemic – looks bright.
For the full list of 2022 Asian Gaming Power 50 winners, click here.
