Melco Crown Entertainment (06883.HK) is set to open its cinematically-themed gaming resort in Macau this year amid a slump in casino revenue in the world’s largest gambling hub.
Studio City, the group’s second flagship property on Cotai Strip which focuses on non-gaming facilities, is scheduled to open in the third quarter of this year, Melco Crown co-chair and chief executive Lawrence Ho said on Monday.
“Melco Crown Entertainment always has a long-term vision,” he said. “There is volatility in the gaming revenue but our investment is long-term. We will not halt the project just because of the recent negative trend in the gaming sector.”
Ho acknowledged that the gaming sector will continue to have a lackluster performance in the first half of the year before a possible rebound in the second half.
Macau’s gaming revenue fell 2.6 percent in 2014, its first-ever full-year decline since the territory opened up its casino industry in 2002. In fact, revenue slipped for seven straight months to December with a 30.4 percent year-on-year drop in the last month.
The US$3.2 billion resort is located next to the Lotus Flower Bridge checkpoint linking Cotai and Hengqin, which Ho said will help to boost visitor traffic.
He is confident that the government will allow it to operate 400 gaming tables.
“The government has said that they will allocate the gaming tables based on which [casino] property is more diversified and contributes to Macau’s non-gaming development. I am confident, as we have built so many attractions in Studio City,” he said.
Ho stressed that 95 percent of the property will be non-gaming.
The entertainment complex seeks to create a cinematic world for its visitors with the Hollywood theme extending to their dining and shopping experiences. Its two hotel towers will offer 1,600 rooms.
Melco Crown Entertainment has announced its decision to delist its shares from the Hong Kong Stock Exchange this month, citing cost and utility concerns.
Ho said the delisting move was supported by the fact that more than 99 percent of the daily average trading quota of its stocks takes place in its primary listing venue, the NASDAQ.
He dismissed speculation that the decision had something to do with the slump in gaming revenue and the ongoing anti-corruption drive in mainland China.
He also noted that all of the group’s ongoing and future development projects, including Studio City, are now fully funded.
“As such, we do not need a channel for listing so far. But we will consider a separate listing for Macau assets or seek other listing venues outside of Hong Kong in the long term if necessary,” he added.
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