Inside Asian Gaming

INSIDE ASIAN GAMING | May 2010 44 ‘One for one’ policy could push up Macau casino building costs The Macau government’s proposal that construction projects should employ one local for every non-resident brought on site have raised fears it could slow down work on future casino projects and push up costs. Possible losers under the proposal could be Las Vegas Sands Corp, which recently announced it was finalising the US$1.75 billion financing necessary to restart its suspended Cotai five and six projects, and Galaxy Entertainment Group, which is fitting out its previously suspended Galaxy Macau resort on Cotai. Macau’s jobless rate of 2.9% in the first quarter would be considered in many jurisdictions to be statistical full employment. Nonetheless, some locals turned out on May Day to protest about imported labour, in a reprise of the demonstrations seen during the height of the casino building boom in 2006 and 2007. Local media said 40 people were injured when the rally turned violent. Fresh push on Ho Tram Plans for a casino resort on the Ho Tram Strip in Vietnam appear to have been given fresh impetus with the appointment of Lloyd Nathan, formerly president of MGM Mirage’s global gaming development, as chief executive officer of the development consortium. Funding for the project—to be managed by MGM MIRAGE and to be called MGM Grand Ho Tram—may now finally be available. Reuters reported recently that hedge fundHarbinger Capital Partners is backing the development consortium, Asian Coast Development Ltd, and that the first phase of the scheme will cost US$400 million. A possible first phase opening in 2014 was mentioned. The original project was for a US$4.2 billion integrated resort. Briefs Regional Briefs That was announced before the 2008 global credit crisis took hold and changed the dynamics of gaming industry funding. The figure of US$4.2 billion is still being mentioned, but the plan now appears to have been split up into more easily digestible chunks to be developed in stages. Asian Coast, which holds a 50-year investment licence from the Vietnamese government, says it plans five individual resorts for the project, two of which will include gambling. The licence allows 180 gaming tables and 2,000 electronic gaming machines split between the two casino properties, reports Reuters . One question investors will want clarified is whether the Vietnam government will allow locals access to the casino resort, as there must be question marks about its viability were it to rely solely on Vietnamese with foreign passports and foreign tourists. Chinese mass-market players or Chinese junket players would be one possible target group. Another possibility would be for Vietnam to adopt a Singapore-style system of allowing locals in to Ho Tram, provided they pay a daily or yearly fee—thereby ensuring that only well-heeled locals can play. Inside Asian Gaming was told recently that Vietnamese banks, backed by the Vietnamese government, were willing to put up half the project costs in a credit package, provided Asian Coast was able to raise the rest on the open market. Mike Ayemong, formerly executive chairman of Asian Coast, is now no longer connected with the project. Cotai–the final frontier for Wynn in Macau Chinese consumers are interested in space, says Steve Wynn. And he isn’t referring to the country’s interplanetary exploration programme. Mr Wynn said during a conference call to discuss his company’s first quarter 2010 earnings that when he builds on Cotai, he will keep it low density and luxurious. “What I believe is missing from Cotai is a legitimate destination resort that has the one thing in China that is so scarce, and that is Labour pains–Cotai projects could suffer in recruitment row Ho Tram–coming soon?