Melco Crown Entertainment Ltd. has site, no casino in Macau

Jun 27, 2011 8:10 PM

Usually, the stories coming out of Macau have been so positive for the gaming industry that they resulted in the shares of gaming companies being sought after by investors.

Last week, however, a story involving Melco Crown Entertainment Ltd. (MPEL) left investors confused.

It was announced a week ago that Melco Crown had purchased a 60 percent interest in Studio City, a development project on the Cotai Strip. Investors were given the impression that Studio City would provide the vehicle for Melco Crown to develop a casino on the Cotai Strip, thus remaining competitive with Las Vegas Sands Corp. (LVS) and Wynn Resorts Ltd. (WYNN), the two companies with Cotai Strip casinos on the drawing boards.

However, on Friday, the Macau Secretary for Transport and Public Works said Macau Studio City was primarily a development for hotels and a film production project, but that there was no casino included in the 2008 development plan.

The Macau official did not disclose whether the Studio City development had applied for a casino license

Lawrence Ho, CEO of Melco Crown Entertainment, indicated that he planned to have 300 to 400 tables and 1,200 gaming machines in Studio City. He has yet to explain the official’s announcement regarding the lack of gaming at the site.