StarWorld’s 'jumbo room' on track

The StarWorld’s “jumbo-VIP” facility has not been affected by the government’s recent announcement of a freeze on gaming table expansion, and it will open in the third quarter. An operator for the facility, which takes up the entire third floor of the StarWorld casino with 100 tables, is expected to be announced soon, according to Galaxy Entertainment Group Deputy Chairman Francis Lui.

Speaking at the company’s annual general meeting in Hong Kong, both Lui and his father, Galaxy Chairman Lui Che-woo, were keen to point out that they felt a tightening of supply in the market was necessary, however, and they supported the government’s recent initiatives. “We are feeling some pressure now,” said the chairman, “we think the number of tables coming onto the market is excessive.”

His deputy agreed. “We hope for a healthy and sustainable development of the market,” he said. “All of us [the six concessionaires] are major investors in Macau’s development. We have committed a lot of capital, and since 2002, we have done well. We should treasure these achievements and we should be able to coordinate our efforts.”

Neither would be drawn on what specific number they believe the six concessionaires should be allowed to operate. “Some have suggested each of us should get another 1,000 tables … the government says it wants a freeze,” said Lui Che-woo. “We just want to see a healthy and sustainable growth in Macau,” Francis Lui said. “Is 62 percent growth [in gaming revenues this year] sustainable? You know the answer to that.”

The Luis were both quick to support the recent tightening of visa restrictions on the mainland, for the same reason. “A short-term adjustment is necessary to lessen pressure on Macau’s infrastructure,” Francis Lui said.

One area where coordination among the six concessionaires may come sooner than expected is in the government’s proposed cap on junket commissions – if the Galaxy group’s position is anything to go by.

“We think 1.25 percent is a good start,” said Francis Lui. “But we think it can go even lower in the future. People like us, who are committing hard investment to make Macau an international destination … we deserve to be properly remunerated.”

The cost of the recent price war among the casino operators, with rising commissions being paid to junket operators, was clearly evident in the Galaxy group’s results for the first quarter of this year. Although the flagship StarWorld’s revenue jumped 28 percent to HK$1.83 billion, its earnings rose only HK$4 million to HK$183 million. The City Clubs, meanwhile, where Galaxy has no investment but takes a percentage of winnings, dropped like a stone amid the price war. Together the four properties earned just HK$3 million, down from more than HK$70 million in the previous quarter.