Inside Asian Gaming

INSIDE ASIAN GAMING DECEMBER 2017 28 Francis Lui DEPUTY CHAIRMAN Galaxy Entertainment Group POWER 6,780 LAST 2 SCORE YEAR CLAIMS TO FAME Has advantage of being a local operator Largest Cotai land holdings of the six gaming concessions More than HK$50 billion in expansion on the drawing board in Macau Hengqin island presence with plans for a non- gaming IR 2 In a year that saw Macau rebound spectacularly from the lows of its widely reported downturn, no operator has reaped the benefits more than Galaxy Entertainment Group (GEG). Skillfully overseen by 62-year-old Deputy Chairman Francis Lui, GEG has made a habit of outperforming the market in both mass and VIP – a testimony to the quality of its offerings and ability to evolve based on the current climate. Particularly impressive was the company’s 3Q17 results, which came after a quarter that saw it forced to shut down casino operations at Broadway Macau for more than a month due to damage caused by Typhoon Hato on 23 August. Galaxy Macau and StarWorld also suffered damage. Despite this, GEG reported a 23% year-on-year increase and 10% sequential increase in revenue to HK$15.9 billion, with EBITDA up 31% on 3Q16 to HK$3.5 billion. Notably, Galaxy has comfortably outshone its rivals on the Macau Peninsula, continuing to record strong growth while other Peninsula properties find themselves in decline. As observed by Union Gaming analyst Grant Govertsen in an October note, StarWorld was “by a very wide margin” the highest growing Peninsula property in 3Q17, with significant non-gaming refurbishment that “quite simply, gives customers what they want.” All of which bodes well given that flagship Cotai property Galaxy Macau has a lot more still to come. Having committed HK$100 billion to the future, GEG broke ground on Galaxy Macau Phase 3 this year with plans for Phase 4 expected to be announced in early 2018. Both will provide more gaming tables and valuable hotel inventory. GEG has ambitions outside of Macau too. In March, the company announced that it had entered a strategic partnership with Monte- Carlo’s SBM to mutually enhance their respective brands and “to work together on the development and operation of entertainment businesses including Integrated Resort projects in the Asia-Pacific region,” specifically opportunities in Japan. Together they are considered a formidable team when it comes to presenting their case for a Japan IR license. Galaxy also owns a large parcel of land on Hengqin Island which it has hinted will eventually be developed into a non-gaming resort on the scale of Chimelong. All of which is a remarkable achievement given that Lui – the son of Hong Kong construction magnate Lui Che Woo – has his background in civil and structural engineering, not gaming. Where Lui and the company as a whole has excelled has been in their ability to make carefully measured decisions – taking their time to watch and learn during the birth of modern day Macau in partnership with Las Vegas Sands before branching out alone via City Clubs, then StarWorld and eventually Galaxy Macau. The fact that mainland China’s influence is gradually seeping ever deeper into Macau can only benefit GEG further. It is no surprise that Lui has dramatically narrowed the gap between himself and top- ranked Sheldon Adelson on the Asian Gaming Power 50 list – from 2,775 power score points in 2016 to just 769 points this year. Watch this space (and race) in the coming years. ASIAN GAMING POWER 50 2 0 1 7