Casino entrepreneur Lawrence Ho Yau Lung admitted on Monday he still had “no idea” how many gaming tables he would get for casino resort Studio City (pictured in an artist’s rendering) in Macau.
Speaking at a media event held at City of Dreams Macau that offered a video preview of the under-construction new property, the co-chairman of Melco Crown Entertainment Ltd confirmed that Studio City – costing US$3.2 billion “all-in” – is likely to open in “mid-year”.
He also confirmed the property had been designed for 500 tables, and the firm “hoped” to get as many as 400 early in the resort’s operation.
Macau’s government has an ongoing cap on how many live dealer tables can be added to the market until 2022.
Mr Ho said at a brief question and answer session after the video preview: “We built the property with a capacity for 500 tables. But the truth of the matter is I have no idea how many tables we are going to get [from the government]. That’s what makes our faith in this market, and in the government, even more spectacular, because we have built this US$3.2 billion resort with all these non-gaming attractions.”
Asked about a mention in a Monday press release from the company about a summer opening for Studio City, Mr Ho stated: “I think it will be mid-year.”
Mr Ho was also asked about the 39 percent gap between the US$3.2 billion project cost for Studio City mentioned on Monday, and a figure of US$2.3 billion mentioned by Melco Crown in June. That was already a 15 percent rise on a previously quoted cost.
Mr Ho stated: “It’s not apples to apples because the US$3.2 billion is an all-in cost including pre-funded interest. The US$2.3 billion is the design and construction cost.”
The executive said the “all-in” figure included the cost of foundations put in by a previous set of investors in the project.
Melco Crown is a 60 percent equity investor in the current Studio City scheme. New Cotai LLC, controlled by funds managed by United States-based investment firms Silver Point Capital LP and Oaktree Capital Management LP, owns the remaining 40 percent.
Mr Ho pointed out that the range of planned attractions – including a collaboration between Hollywood studio Warner Bros and American comic book publisher DC Comics for a virtual reality ride called ‘Batman Dark Flight’, plus a 130-metre (427-feet) high ferris wheel to be called the ‘Golden Eye’ and said to be Asia’s tallest – would help Macau to “diversify” its offer to tourists.
In addition, Melco Crown on Monday also confirmed the venue would have a 5,000-seat ‘Studio City Entertainment Center’, a fully-operational television broadcast studio called Studio 8, and a nightclub under the Pacha branding made famous in Ibiza, Spain. There will also be a 300,000-square foot (27,870-sq metre) themed shopping mall.
Monday’s 30-minute presentation on the new resort included a sneak preview of a short promotional film called ‘The Audition’, starring Robert De Niro, Leonardo DiCaprio and Brad Pitt. It has been directed by Martin Scorsese and is due to have its global premiere at Studio City’s launch.
Mr Ho said Studio City would be mass-market focused with a “strong premium [mass] component” because of its location near the Lotus Bridge crossing point linking Cotai to neighbouring Hengqin Island, a special economic zone of mainland China that has recently opened a range of non-gaming family-based attractions including a theme park.
“People can cross Lotus Bridge and literally within 30 seconds they are at Studio City,” said Mr Ho.
The executive added he was happy to see the Macau market “rebalancing” away from reliance on VIP revenue.
“Ten years ago when we did the IPO [initial public offering] for Melco Crown on Nasdaq, I was telling people that mass is going to take over. I was early by seven years with my prediction, but I think that’s coming true,” he added.
Mr Ho reiterated that the reasons for Melco Crown seeking delisting in Hong Kong were purely administrative, and said the company had no plans currently for any fresh listing anywhere else to raise capital for any other schemes that it might pursue.
He described the Hong Kong delisting plan as a “non-event”.
“I honestly don’t know why it has been made into a bigger deal than it is,” he told the gathered media. “Our primary listing has been on Nasdaq from the very beginning. And in addition to Macau we are regulated in all the gaming authorities that Crown is a part of. That includes Las Vegas, Pennsylvania, New South Wales, Victoria…The sole purpose for the [Hong Kong] delisting is that we have 99 percent of our trading volume in the U.S.”
Melco Crown is a joint venture between Australia’s Crown Resorts Ltd, controlled by billionaire James Packer, and Melco International Development Ltd, headed by Mr Ho.
Mr Ho added: “In no way is the delisting related to the slump in the gaming revenue in Macau, and it has absolutely nothing to do with the anti-corruption issue in China.”
Asked if the Macau gaming downturn meant the company might be laying off staff, Mr Ho said no, adding the firm was planning to hire “8,000 to 10,000” extra staff for Studio City.
Talking about the possibility of other projects for Melco Crown in the region, in addition to City of Dreams Manila, which had a soft opening in December, Mr Ho observed: “There are still development opportunities in Macau… After we’re done with phase one, there’s still phase two. We’ve only built on two thirds of the [Studio City] site.”
He continued: “Of course we’re going to have to get the concurrence and support of the minority shareholders [for further development] – who have been great throughout this [initial] process. It’s going to be a very big equity cheque to write [for another phase]. So I don’t know if they are ready to write that cheque at this present moment in time.”
Mr Ho added: “But in terms of other jurisdictions… to be honest there are no jurisdictions as good as Macau.”
(Updated at 4:25pm)
Nov 28, 2022The stock prices of Hong Kong-listed firms directly linked to Macau casino operations rose in Monday trading, following the Saturday announcement that the six incumbent licensees had each been...
"Genting was always facing an uphill battle to displace an existing concessionaire"
Founder of consultancy Newpage Consulting