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Macau casino building boom outstrips Vegas Strip growth
Last Updated(Beijing Time):2007-01-15 15:31

Casinos in Macau are growing faster than Las Vegas as more people come to gamble, MGM Mirage Chief Executive Officer Terrence Lanni said in an interview with Bloomberg News.

"Macau is a staggering market," Lanni said. "It's growing at rates that are significantly higher than the growth rates recently in Las Vegas, and it's been rather robust in Las Vegas."

MGM Mirage is the world's second-largest casino company.

In 2006, Macau's casinos raked in an estimated US$6.8 billion, probably overtaking the Las Vegas Strip, said Rob Hart, a Hong Kong-based gaming and property markets strategist for Morgan Stanley. The Strip took in about US$6.5 billion.

MGM, based in Las Vegas, is building a US$1.6 billion resort in Macau, due to open at the end of this year, with Pansy Ho, the CEO of Shun Tak Holdings Ltd.

In Macau, which measures 28 square kilometers, Las Vegas Sands Corp, Wynn Resorts Ltd and local investors also are building new resorts.

Stanley Ho, who had a monopoly on Macau gaming for four decades until 2004, has seen his share of gambling revenue dive, and it's still shrinking. Two of Ho's 17 children, including Pansy, have formed a joint venture with his Western rivals.

Growth in the region will continue as long as China's economy expands, Lanni said. The territory, with a population of 500,000, is the only place in China where people can gamble in casinos.

While Asian visitors to Macau are beginning to spend more on shopping, spas and nightclubs, "it will take a period of time to match what we have in Las Vegas," Lanni said. About 98 percent of revenue in Macau comes from gaming, while in Las Vegas, 62 percent of revenue comes from hotel rooms, food, retail and entertainment and the rest percent from gambling.

MGM Mirage, which billionaire investor Kirk Kerkorian founded as MGM Grand Inc in 1997, owns and operates 23 properties located in Nevada, Mississippi and Michigan and has investments in three others in Nevada, New Jersey and Illinois. The resort in Macau is currently the only MGM property outside the United States, said Gordon Absher, an MGM spokesman.

MGM, which operates the Bellagio and Mandalay Bay in Las Vegas, is spending US$7 billion to develop a 66-acre complex of hotels, casinos and condominiums on the Strip that's expected to open in 2009.

Harrah's Entertainment Inc, the world's largest casino company, last month accepted a US$17.1 billion offer from Apollo Management LP and Texas Pacific Group in the fourth-biggest private-equity buyout ever.

"It's very good for the industry overall," Lanni said.

Source:Shanghai Daily 
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