THE Macau government is on the verge of dumping two of the three successful applicants for casino licences and has told a rival operator to be ready to step in as a replacement.
Wynn Resort and Galaxy Casino had asked for a five-year extension to their 15-year contract as a condition for signing the licence agreement, according to a government source.
MP Entertainment, which had failed to win a licence, had been told to step in if Wynn and Galaxy failed to sign the agreement by April 1. So far only casino king Stanley Ho’s company had agreed to sign before the deadline, the source said.
Wynn and Galaxy argued that they should have a five year advantage over Ho as his casino operation was already established.
They said they needed the additional time to build up an infrastructure to rival that already available to Ho’s Sociedade de Turismo e Diversoes de Macau (STDM).
STDM is the parent company of the other casino licensee Sociedade de Jogos de Macau (Macau Gaming Company), which now operates Macau’s largest casino at the Hotel Lisboa.
“Wynn and Galaxy believe they have to start from scratch, while the Macau Gaming Company is already prepared as it has the existing hardware and software [from STDM] available,” the source said. He said the Wynn and Galaxy were pressuring the government in the hope that it would soften its stance and grant their wishes.
Galaxy Casino is part-owned by the US entertainment corporation Venetian and Hong Kong property magnate Lui Chi-woo.
With a reported 30 per cent stake in Galaxy, Venetian’s involvement was vital to the bid.
The company is owned by Las Vegas Sands, which in turn is owned by billionaire Sheldon Adelson.
Las Vegas casino giant Wynn Resorts (Macau) is controlled by US casino tycoon Steve Wynn, who developed the Mirage and Bellagio hotel complexes on the Vegas strip.
While MP Entertainment is the favoured replacement of Online Casino Singapore, Grand Macau Gaming or Macau Star had also been told they should be ready to come in as late replacements, if the firms failed to sign the agreement, the source said.
MP Entertainment is jointly owned by Park Place, the world’s biggest casino company, and the Mandalay Resort Group.
But the government source said it had not yet given up hope of persuading the two to sign, although it was preparing for the worst.
Despite Galaxy’s demand, it recently obtained a letter of credit for $700 million to support its interest in the casino project.
Wynn Resorts, however, might not be able to open this year due to delays in preparations, the source said.
Galaxy promised it would invest $8.8 billion. Ho’s SJM had committed itself to spending $4.7 billion, and Wynn had promised to invest at least $4 billion.