Tables turn on Crown's Macau venture, by Vanda Carson - The Sydney Morning Herald - 8th October 2008

James Packer's Macau casino joint venture is on a losing streak, struggling more than its rivals to cope with the downturn in the world's largest casino market.

Melco Crown has slumped to fifth place after it lost patrons to its rivals Wynn Resorts and Galaxy. The VIP casino only managed to hold on to 8 per cent of the Macau market, well down from the 18 per cent it had in April, losing its perch as the third most successful casino operator.

It normally fights for this position with Wynn Resorts, which had 19 per cent of the market in September. It also lost out to the smaller rival Galaxy, which grabbed fourth place with 10 per cent of the market. Melco Crown's woes came as the former Portuguese colony finally fell victim to the slump that has been sapping Las Vegas for months.

Industry observers had feared Macau was next to be hit, and gambling revenues made public yesterday have confirmed its fall from grace.

Revenues in Macau last month fell for the first time in more than three years, according to the Portuguese news agency Lusa.

Casino revenues fell to 6.9 billion patacas ($1.1 billion) in September, down 3.4 per cent on this time last year and 28 per cent from August. Macau's gaming sector was regarded as almost unstoppable - until the Chinese Government began capping the number of visits it allowed its citizens to make to Macau each year.

Gambling in Macau has grown continuously since July 2005 and at an average of 52.5 per cent each month in the first eight months of this calendar year.

Overall revenues this year are still 45 per cent ahead of the record-breaking $US10 billion achieved last year. But September was also Macau's smallest monthly taking in more than a year, Lusa reported. Only last week Beijing again extended the clampdown on residents visiting Macau - they can travel to Macau just once every three months.

Macau gambling authorities will release official quarterly statistics on October 16.

James Packer's Crown Limited, which owns 37 per cent of Melco Crown, is now relying on its Australian gambling operations for increased revenues.

The slump also puts pressure on Melco Crown's $2.5 billion City of Dreams casino, which is due to open in Macau next year. The Macau slowdown echoes that of Las Vegas, where casino revenue on the city's Strip fell 15 per cent to $US820 million in July.

Shares in Crown closed down 4 per cent yesterday, or 30c, at $7.16.

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