Beneath the sparkle, Macau turns into a tough joint - 21st October 2008

Nothing is going right for James Packer - or his casino rivals.

The news out of Macau keeps getting worse for James Packer.

First he lost 10 per cent market share between April and September, then he pushed back the opening of the $2.4 billion casino and hotel project, City of Dreams, by three months.

Now it appears the slowdown in Macau gambling is almost entirely due to a fall-off in the number of VIPs at baccarat tables.

Given Crown Macau focuses almost entirely on VIPs, it's not a promising sign.

In the September quarter, VIP revenue fell 14 per cent from the previous quarter to 17.25 billion patacas ($3 billion), according to the latest statistics. VIP was once worth almost 70 per cent of the Macau market, but it has now slipped to just over 66 per cent.

And the rumours keep circulating that the company which brings Melco Crown's gamblers through the doors, Amax Entertainment, is losing a lot of its agents - also known as sub-junketeers. The sub-junket operators help organise group bookings at the casino-hotels.

The South China Morning Post also noted yesterday that since Macau's gambling revenues started heading south, Amax has stopped the monthly disclosure of its VIP chip sales.

In September Macau's gaming revenue fell 3.4 per cent from a year ago and 28 per cent from the previous month.

The other mob

And James Packer's casino rivals are in trouble too. The US gaming firm behind the Venetian casino in Macau has pulled its plans to raise $US5.25 billion ($7.5 billion) in loans to fund its expansion.

It had hoped to build another casino over the road from the Venetian, which is in the area known as the Cotai strip in the southernmost casino area.

Las Vegas Sands shares closed in the US on Friday at $US13.06, less than a tenth of its high last year of $US148.76.


(Credit: The Sydney Morning Herald)

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