Bigger dreams for Macau's Melco

April 08, 2008 7:00 PM
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by Ray Poirier | Have faith, the best is yet to come. That’s essentially what Lawrence Ho told investors and analysts during the conference call that was held by Melco PBL Entertainment Ltd. (MPEL).

Ho, son of legendary gaming operator Stanley Ho, formed Melco PBL with his partner, James Packer, executive chairman of Crown Ltd., the largest gaming company in Australia and son of famed gambling whale, the late Kerry Packer.

The two got together to enter the Macau gaming market by buying a sub-concession from Steve Wynn.

Although a bit slow in getting started, Crown Macau found its gear in the latter part of 2007 when it signed up one of Asia’s most successful high-roller hosting companies. The move began paying dividends in the fourth quarter of the 2007 fiscal year.

But Ho’s excitement for the future centered on the company’s mega-project on Macau’s Cotai Strip called City of Dreams.

"Our dreams are taking shape," said Ho. "In approximately one year, City of Dreams will begin to welcome visitors from all over the world.

"Macau is transforming from a gaming-focused destination into a leisure hot spot. City of Dreams will continue to drive this phenomenon and usher in a new era of gaming and entertainment in Macau," he added.

By size alone, City of Dreams will be unique. In addition to all the usual Las Vegas-styled restaurants and entertainment venues, City of Dreams will have a 420,000-square foot casino with over 550 gaming tables and 1,500 slot machines.

And, as a free attraction, the property will offer a spectacular and imaginative production staged by Franco Dragone of Cirque de Soleil fame. At a recent topping off ceremony, he said he personally will direct the "breathtaking water-themed" show.

City of Dreams, not unlike the property being developed in Las Vegas by MGM MIRAGE Inc. (MGM), will offer four hotels, the Crown Towers Cotai, Hard Rock Hotel, the Grand Hyatt’s twin towers and the "Apartment" hotel.

Analysts have been making positive comments about MPEL investments, noting that the property has grown in market share to become the equal of the much bigger Las Vegas Sands Macau. Considering that Macau gambling revenues increased by nearly 60%, year-over-year, in the month of February, this seems to bode well for Melco PBL as well as for market share leader, SJM, owned by Stanley Ho.