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Update On Macau 1 May 2006 Hotels Know the players : The government issued three casino concessions in 2002 to SJM, controlled by long-time concession holder Stanley Ho; Wynn Resorts, Las Vegas; and a joint venture composed of Galaxy and the Las Vegas Sands Corp. Only the Sands is up and running. The Wynn project should open late this year or early in 2007. A joint venture between MGM Grand and Pansy Ho is under construction. If regulatory approvals come through, the project will open in early 2007. Longer term, Las Vegas Sands is planning the Las Vegas Strip in Cotai and already has signed agreements with operators such as Hilton and two of Starwood's brands, Sheraton and St. Regis.
Know the odds : Gaming companies locked out of the licensing race are looking for ways to enter this highly lucrative market. PBL scooped up a US$900 subsconcession from Wynn Resorts. While current growth plans underscore the potential of Macau, there is some degree of unease among foreign regulators and some operators that the market is regulated insufficiently, that organized crime has involvement in the gaming industry and that the legal system remains opaque. The issues and the will of Macau regulators to regulate Macau to minimal international standards ultimately will set the standards for casino licensing and operations.
Know the competition : For the present, Singapore is the obvious gaming magnate. Its Marina Bay request for proposals (RFP) has been issued; the Sentosa RFP will be issued. Also consider South Korea (where most hotel casinos are open only to international visitors), Malaysia, Tinian, Australia and Goa. For the future, if the governments proceed, consider Japan, Thailand and expanded opportunities in Vietnam.
Contributed by Frederic E. Gushin, managing director, Spectrum Gaming Group, Pennington, New Jersey, and Paul Bromberg, chief operating officer, Spectrum OSO Asia Ltd.
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