In an aggressive move to claw back lost market share, Galaxy Entertainment Group, the Macau gaming company controlled by the family of Hong Kong property and construction tycoon Lui Che-woo plans to more than double VIP gaming capacity by forging an alliance with a large high-roller junket operator.
The management said yesterday that the flagship StarWorld casino hotel was adding up to 100 new gaming tables in a 'jumbo-sized VIP facility', up from its current 69 VIP tables, under a deal to be modelled on rival casino operator Melco PBL Entertainment's recent co-operation with a VIP junket operator owned by locally listed A-Max Holdings.
Market sources yesterday identified Galaxy's new 'jumbo' junket partner as the Neptune group, a locally listed firm that invests in VIP gaming junkets, taking customers to casinos at StarWorld, Venetian Macao and Sands.
'I'll have to hold back some of the answers until we announce the deal in more detail in the next two to three weeks, but we are going to put in a jumbo facility for up to 100 tables,' chief operating officer David Banks said yesterday at the firm's annual results media conference.
'We don't want to drop our margins too quickly and we want to see what's happening in the marketplace.'
Revenues in Macau's high-volume, low-margin VIP gaming segment soared 73 per cent in the first quarter to 20.8 billion patacas, data released this week by the territory's gaming regulator showed. The increase was partly driven by Melco PBL's December junket deal. A unit of A-Max contracts to send high rollers to the Crown Macau casino in exchange for a higher than average 1.35 per cent commission on VIP gambling chip sales.
Galaxy's share of Macau's gaming market fell to 10 per cent in the first quarter from 15 per cent in the fourth quarter, Deutsche Bank analyst Karen Tang wrote this month in a research note.
