Galaxy Ent keeps options like Thailand in mind: firm

Jul 30, 2024 Newsdesk Latest News, Macau, Rest of Asia, Top of the deck  

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Macau casino operator Galaxy Entertainment Group Ltd has told GGRAsia it is “focused” on its development in that city, but wanted to “keep its options open”, acknowledging that Thailand is “one of the most popular destinations” for travellers.

The comment was from Buddy Lam Chi Seng, the casino group’s director of corporate affairs. It was in response to GGRAsia’s enquiry after a Monday report from brokerage CLSA Ltd suggested Galaxy Entertainment was among four of Macau’s six operator brands likely to be interested in – and have the financial capacity for – investment in casino business in Thailand, if that Southeast Asia nation legalises such activity.

The brokerage surmised Thailand could be at minimum a US$8.5-billion market annually in terms of gross gaming revenue (GGR).

Thailand’s House of Representatives in March backed a study by a panel of lawmakers that favoured the setting up of legalised casinos within large entertainment venues to attract tourists. Each casino resort would require at least THB100 billion (US$2.78 billion) in investment, as suggested in the House committee report.

As of March 31, Galaxy Entertainment’s cash and liquid investments amounted to HKD26.4 billion (US$3.38 billion) and the net position was HKD25.0 billion after debt of HKD1.4 billion.

Mr Lam stated in his Monday remarks: “Galaxy Entertainment Group remains focused on our development in Macau.”

“We will look at overseas opportunities on a case by case basis,” he stated. “We believe that it is important to keep our options open and to be flexible to changing market conditions.”

Galaxy Entertainment has recently been wrapping up Phase 3 of its Galaxy Macau casino resort – including a new luxury hotel called Capella at Galaxy Macau. The group is already advancing construction of Phase 4 which is due to be finished in 2027, according to commentary in May. The firm has budgeted to spend HKD43 billion on Galaxy Macau.

“Thailand is one of the most popular destinations among travellers in the world, renowned for its warm hospitality, beautiful scenery and diverse food offerings. We believe it will draw a lot of attention if it decides to open for IR [integrated resort] development,” observed Mr Lam.

MGM, Wynn, LVS also watching

According to industry observers, five possible locations had so far been mentioned for casino resorts in Thailand. Two were in the capital, Bangkok, and there had been mention of one each in: the country’s Eastern Economic Corridor; Chiang Mai; and Phuket.

The parent businesses of three other Macau operators where mentioned by CLSA as potentially being in the running for Thailand, should legalisation proceed. They were MGM Resorts International, majority owner of MGM China Holdings Ltd; Wynn Resorts Ltd, parent of Wynn Macau Ltd; and Las Vegas Sands Corp, controller of Sands China Ltd.

All three have made previous comment on the topic, but with each of them saying they wanted to understand first how the market is likely to be structured.

Patrick Dumont, president and chief operating officer of Las Vegas Sands, said on the group’s July 24 call to discuss its second-quarter earnings: “I think Thailand is a very interesting opportunity.

“The market there is very strong for different types of tourism. And I think depending on the way it’s set up and the opportunity that’s there in terms of structure, it could be very interesting for us.”

He stated referring to the group’s existing casino resort business in Macau and at Marina Bay Sands in Singapore drawing players from Thailand: “We love the market as a place to source customers.”

He added: “If you go and visit, you’ll have a great experience there, and we’d love to be part of it. So, if Thailand becomes available, we’d be very interested.”

Though Mr Dumont also noted of Thailand’s possible casino legalisation: “I think it’s early days yet. We’ve been spending time there along with the rest of our industry, looking to see if we could be helpful to that process. And we’re waiting and seeing what happens.”

Understanding opportunities

On MGM Resorts’ first-quarter earnings call on May 1, Bill Hornbuckle, that group’s chief executive and president, stated the company was also keeping an eye on Thailand.

He said the group was “trying to understand” the opportunities in Thailand, and what that market “may ultimately bring to the company”.

MGM Resorts is already committed to diversification in Asia as majority partner in a JPY1.27-trillion (US$8.20-billion currently) casino complex in Japan, MGM Osaka, due to open in 2030.

Wynn Resorts for its part is working on a scheme in the Middle East, called Wynn Al Marjan Island, in Ras Al Khaimah, in the United Arab Emirates. It is described as US$3.9-billion venture involving local partners, in which Wynn Resorts is a 40-percent equity investor.

Craig Billings, Wynn Resorts’ chief executive, stated on its first-quarter conference call on May 7: “In Thailand, it’s early days and we have yet to see the regulatory and licensing structures.

“Thailand is already a major tourism destination with significant tourism infrastructure and a world class service culture. So, we will continue to closely monitor advancement of the legalisation process.”

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