Melco Crown to Come Up with $3.2 Billion Casino in Macau

The news of Melco Crown Entertainment Limited coming up with a $3.2 billion casino in Macau on October 27 comes as a shot in the arm for the struggling gaming market of the city.

The downturn in Macau is a big concern to casino operators, and it’s getting worse by the day as the gaming capital is going through its record 14th straight month of decline following five straight years of growth.

Lawrence Ho, co-chairman of Melco Crown, expressed optimism about their upcoming venture. “Macau is going through a transitional phase from a very VIP gaming centric market to more mass focused,” Ho said in an interview in Macau. “It’s probably going to be a rough second half. Hopefully with Studio City opening it would be a new catalyst for the market,” he said.

Melco, controlled by billionaires Ho and James Packer, have big plans in this Hollywood-themed new resort which will have Asia’s highest Ferris wheel and family entertainment developed with Time Warner Inc. Melco had even spend $70 million to make a promotional film directed by Martin Scorsese and starring big Hollywood stars Robert De Niro, Brad Pitt and Leonardo DiCaprio.

Studio City will be Melco’s fourth casino with about 1,600 new hotel rooms. It will also have a theatre for magic shows, a 5,000-seat entertainment center and a TV production studio. The resort is situated next to the Lotus Bridge, which links to the developing Hengqin island in China’s Zhuhai city.

The resort will have a flight simulation ride with Batman flying through Gotham City and a 40,000 square feet (3,700 square meters) indoor play center with rides and other interactive facilities featuring DC Comics characters such as Daffy Duck and Bugs Bunny.

No doubt the plan is to develop it as a major tourist attraction and woo holidaymakers who have been kept at bay by China’s slowing economy and graft crackdown.

“The combination of new entertainment attractions will really focus on the mass market and goes beyond most of the other properties that still have a core of just casinos and shopping,”Tim Craighead, an analyst with Bloomberg Intelligence, said.

Although many feel that the decline in Macau’s gaming industry is a result of political crackdown by the Chinese government which has discouraged a vast majority of visitors from travelling to Macau, Ho is hoping that Macau’s relaxed travel rules, instituted on July 1, that allow Chinese residents to stay in Macau for longer periods of time, will help improve the scenario.

But gaming will always be the financial engine for Melco Crown, with non-gaming amenities acting as an additional draw for the customers. The company is thus “actively” in talks with the Macau government on gaming table allocation for the new project, and is hoping to get 400 of them.

“We hope the government will reward us more, for the hard work we have put in over the last 10 years,”Ho said at a press conference.

However, Melco are not the only casino operators banking on improving market conditions in Macau. There are other developers too who are planning to splash an estimated $27 billion in investments in the near future in the area.

Billionaire Steve Wynn last week said he finally felt confident to announce an opening date (March 25, 2016) for his second project in Macau after the local government approved the number of workers needed to build the resort. Sands China Ltd. chairman Sheldon Adelson also made public a plan to open a $2.7 billion Parisian resort in a year.