Melco’s big bet
The worldwide recession has had the casino operators reeling under severe profitability pressures. So much so that the Las Vegas Sands Corp. (NYSE: LVS) halted construction on a nearby project in Macau as revenue plummeted and credit markets squeezed.
Macau intends to convert the reclaimed land of Cotai into a gambling and entertainment haven that is second to none. City of Dreams’ performance would set the stage for Macau to move beyond its image of the hardcore Chinese gambling set.
Winson Fong, analyst at SG Asset Management H.K. Ltd, noted, “The gaming sector had a very bad year in 2008 because of a weakening Macau economy. Now, people are buying into the sector because as a speculative one, it tends to perform better during a recovery.”
And that’s precisely what Melco has wagered on, through COD. The stakes are very high indeed. Melco Crown Chief Executive Officer Lawrence Ho realizes that. He said that a poor reception for City of Dreams may spell “the endgame for us”.
Ho said in an interview on Monday, "It is a crucial project. What is good for us ... is good for our competitors and is good for Macau."
City of Dreams
The expansive $2.1 billion project on Macau’s Cotai strip that promises to provide a pulsating gaming environment through its breathtaking vibrancy, dazzling lights and animated sounds houses three hotels, over 500 gambling tables, 1500 machines, over 20 restaurants and bars, an upscale shopping mall and a multimedia theater. City of Dreams, popularly known as COD, can lay claim to being the second-largest casino complex in Macau.
Spread over a sprawling area of 420,000-square-foot, COD has been built in the style of a podium, with four towers: namely the Hard rock Hotel, Crown Towers, the Grand Hyatt Macau, and a 47-storey luxury apartment block. COD is located directly opposite The Venetian Macao, Asia’s largest casino resort.
Macau, an autonomous special administrative region of China, is the only place in China where casinos are legal.
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