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Macau restricting casino growth on Cotai Strip

Apr 25, 2008 7:57 PM

by Kevin Stott |Saying he was following directives from Beijing, Chief Executive of the Macau Special Administrative Region Edmund Ho announced on Tuesday a freeze of new gambling licenses and land allocations for new casinos in the world’s largest gambling center in a move designed to slow the breakneck pace of casino growth on the Cotai Strip according to the International Herald Tribune.

Among the new restrictions announced on Tuesday was a moratorium on applications for new slot machines and tables at existing Macau properties, a move that could stifle expansion plans for gambling machine manufacturers like Shuffle Master (SHFL), International Game Technology (IGT) and Aristocrat Leisure (ARLUF, OTC).

Shares of these three companies stood solid in Thursday trading with Shuffle Master shares up 7 cents to $4.87 (+1.46%), IGT issues trading up 43 cents to $34.73 and Aristocrat Leisure shares – an over-the-counter stock – unchanged at $7.70.

A four-decade monopoly by casino entrepreneur Stanley Ho expired in 2002 and other players, like Las Vegas Sands, MGM MIRAGE and Wynn Resorts were allowed in. The former Portuguese colony – whose gambling revenues surpassed Las Vegas in 2006 – now has 29 casinos. Macau raked in over $10.3 billion in gambling revenues in 2007, up from $6.95 billion in 2006. The Las Vegas Strip reported $6.69 billion in gambling revenues in 2006.