Inside Asian Gaming

INSIDE ASIAN GAMING | December 2011 6 Cover Story F ollowing the mid-May opening of its new flagship property—the expansive HK$16.5 billion (US$2.1 billion) Galaxy Macau resort on Cotai— Galaxy Entertainment Group (GEG) soared from near the bottom of the revenue share league table of Macau’s six casino operators to second place. Only the city’s previous monopoly casino operator, SJM, did better. GEG maintained that second place ranking into October (the most recent available official figures). That’s no small feat for a company that hasonly sevenyears’operating experience in the casino industry, and is pitted against international market stalwarts such as Las Vegas Sands Corp, Wynn Resorts and MGM. GEG’s market share surge was primarily the result of its soaring VIP baccarat revenue, driven by the significant expansion of its VIP capacity as Galaxy Macau came online. The property’sswankyVIPgamingrooms(butnot itsmaincasinofloor)weredesignedbyworld- renowned casino architect Paul Steelman, and easily drew in junket operators and their high-rolling customers. GEG has continued to expand the VIP facilities at Galaxy Macau as the growth of Macau’s overall VIP baccarat sector continues to outpace that of its mass market. Galaxy Macau’s stock of VIP rooms increased from seven at opening to ten by the third quarter of 2011. In absolute terms, the mass market still only makes a paltry contribution to GEG’s total revenue—with the company’s main gaming floor table revenue (excluding slots) constituting just 14.4% of its total table revenue in October. In relative terms, however, GEG’s mass-market revenue has been exploding (growing at a much faster rate inpercentage terms than itsVIP revenue) since Galaxy Macau provided the company Shining On Seven months on from its opening, Galaxy Macau’s new property honeymoon period is over, but its popularity seems undiminished. Inside Asian Gaming spoke to Galaxy Entertainment Group President and COO Michael Mecca about how the erstwhile VIP-focused casino operator is slowly building its mass-market business with its Cotai resort