Galaxy’s expansion into Macau

GALAXY Entertainment Group Ltd may be looking into expanding into Macau. This would fall under their second phase of development of its Cotai casino, according to an investment bank. The reports first surfaced in the macaudailytimes.com. Journalists have been invited to a press conference tomorrow in Hong Kong which will be attended by Chairman Lui Che Woo and Vice Chairman Francis Lui. The invitation didn’t disclose the details of the event. Peter Caveny, vice president of Galaxy’s investor relations, declined to comment further.

“We expect Galaxy to announce the Galaxy Macau Phase II development on Thursday,” Grant Govertsen, managing partner of Union Gaming Group, said in an e-mail yesterday. “We would expect the project cost of Phase II to be in the neighborhood of the first phase, or up to HKD16 billion (USD2 billion).” Union Gaming Group focuses exclusively on the gaming industry and provides global equity research and related market and economic analytics. This is no surprise, considering that Macau is the world’s biggest casino hub, with USD34 billion in gambling revenue last year, almost six times the USD6.07 billion of Las Vegas, according to figures provided by the Macau and Nevada authorities.

“We believe the pending announcement and the capital needs of Galaxy Macau Phase II is the primary reason as to why Galaxy Entertainment hasn’t instituted a dividend,” said Govertsen, who was previously an analyst on the North American equity research team at Deutsche Bank.