Galaxy plans $2.1B Macau casino expansion

[April 26, 2012]  HONG KONG (AP) -- Galaxy Entertainment Group plans to double the size of its flagship Macau casino in a $2.1 billion expansion as it seeks to win over more customers in the world's biggest gambling market.

The Hong Kong company said Thursday it has already started construction of the second phase of its Galaxy Macau casino complex, which opened last year in the Cotai district.

The new wing will include 500 more gambling tables, 1,000 slot machines, two new hotels and more shops and restaurants. Floor space will increase to 1 million square meters (10,763 square feet). Completion is expected by 2015.

The company will fund the 16 billion Hong Kong dollars ($2.1 billion) project with cash and debt and does not plan to issue any new shares.

Macau is the only place in China where casino gambling is legal. Macau's economy has boomed since the government ended a gambling monopoly in 2002, allowing in other companies that include Wynn Resorts Ltd. and MGM Resorts International and Las Vegas Sands Corp.

Gambling revenues rose 27 percent in the first three months of 2012, after rocketing 42 percent last year to $33.5 billion, more than five times the amount earned by Las Vegas Strip casinos.

Growth has been powered by hordes of wealthy high-rolling gamblers from mainland China, who are estimated to account for more than two-thirds of the total. But the government wants to broaden the economy away from the big spenders by encouraging development of more non-gaming attractions.

Galaxy Chairman Lui Che-woo said the expansion will help the company "diversify its long-term income stream" by attracting more new customers looking for a resort experience.

Galaxy's casino, which already boasts a wave pool and artificial beach, is one of several resorts in Cotai, an area of reclaimed swampland connecting two islands.

Analysts expect Cotai casinos to benefit from growing numbers of middle-class visitors drawn to shopping and other attractions not found at the aging, seedy gambling parlors on the Macau peninsula. New transportation links to mainland China and Hong Kong, an hour away by ferry, will also help boost the so-called mass market.

[Associated Press; By KELVIN CHAN]

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