The gambling industry on a global scale sees development on a daily basis since every casino operator has a certain agenda which is being followed through. The big plans for constructing new gaming facilities around the world help those well-known brands to make their names even more popular and this, in turn, brings them more benefits. Exploring new markets is also on the agenda of many leading gambling operators, which are willing to enter a new jurisdiction and introduce their services to the people there, as this could guarantee them a new source of revenue.
One of the main developers in the largest gambling hub in the world, Macau recently revealed its plans for making its way to new and uncharted territories. At the moment Galaxy Entertainment Group oversees the operation of StarWorld Macau, and four City Club casinos, which are located inside the Waldo Hotel, President Hotel, Rio Hotel, and Grand Waldo Hotel. There are also the properties situated on the Cotai Strip, which are to the likings of Broadway Casino and the Galaxy Macau. The latter is probably the company’s most popular facility which also bears the same name.
The plans for exploring new location are not a surprise to anyone in the gaming industry, as the casino developer is constantly on the look for new projects and opportunities for construction. Being one of the six casino operators which are currently working in the Chinese territory of Macau, Galaxy has quite the experience in managing casino venues and casino resorts. The future project which was revealed by the operator could cost as much as $500 million to the company, according to the initial estimations.
At the moment Galaxy researches its options for constructing in the Philippines, as the location provides a new market which has not yet been penetrated by the Hong Kong-listed developer. Its plan is for building a premium quality eco-friendly beach resort on the Boracay Island as when the construction is finished this will be the only location operated by the casino developer outside Macau. Deputy Chairman Francis Lui stated that the company is currently looking into the future project and making sure that the beach resort could be successfully constructed in the exotic location.
What Could Facilitate the Project?
Galaxy has entered a collaboration with Alfredo Benitez, who is the founder of Leisure and Resorts World Corp. One of the reasons for exploring the Philippines gaming industry is because this will provide the gaming developer with more freedom away from the restrictive policy of Beijing. Travel restrictions are also another thing which could not be found in the Philippines. All these factors could guarantee a smooth start of the planned beach resort, as the gambling sector is ready to welcome another player.
According to Mr. Lui, the relationship between China and the Philippines has seen an improvement in the recent years and it is now a preferred destination for Chinese tourists willing to travel abroad. The Island of Boracay also features a new airport which has a direct flight from the southern part of China to the island. This introduction has reduced travel time from 6 hours to 1.5 hours, making it even easier for tourists to make their way to the desired destination.
Galaxy Entertainment also mentioned in a statement that it is considering building a low-density integrated resort on Hengqin Island which will aim to complement the existing facilities located in Macau. More information regarding the future project of the company will be revealed in the upcoming months.
Foreseeable Future and Revenue Data
Another important event which has the potential to affect the operation of Galaxy Entertainment is the future expiration of gambling licenses which is going to take place in 2020 and 2022 in Macau. Every gambling location operates under a special gaming contract issued by the authority of Macau which has approved its development and regulates the development of the facility. All of the currently existing gambling locations will have to have their gaming licenses renewed. This is a pivotal moment in the development of the gaming hub as it could make or break the development of certain brands in the area.
Amidst the concerns of some of the developers, the management of Galaxy is confident that its prospects for future development and casino licenses renewal are more than positive. The reason behind this is hiding in the figures which the company issued in its most recent revenue report. This Wednesday saw the official announcement that the developer witnessed a 67-percent jump in its 2017 net profit in comparison to the figures it saw in 2016. As a result, the casino operator saw net profit amounting to HK$10.5 billion (US$1.34 billion) throughout 2017, whereas the year 2016 saw only HK$6.28 billion.
The surge is due to the higher gambling revenue generated by the company which saw an 18-percent jump, resulting in HK$62.5 billion. Prior to the issuing of the report, many analysts in the field made their forecasts for the net profit known and according to the polls conducted by S&P Global Market Intelligence, Galaxy was expected to amass some HK$9.79 billion net profit instead.
Furthermore, it was announced that the company is continuing ahead with the development of Phases 3 and 4 of Cotai projects, which will aim to bring the spotlight on non-gaming, primarily targeting entertainment family-friendly facilities. It will also focus on constructing venues which could accommodate more meetings, incentives, conferences, and exhibitions.
In Conclusion
Galaxy Entertainment is one of the best performing gaming operators in Macau and as such, it is looking for opportunities to utilize its reputation of reliable developer and branch out to other jurisdictions. The plans for developing in both Boracay Island and Hengqin Island have the potential to provide the company with a source of steady gaming profit, as well as to improve the casino industry in the region.
