PacificNet seals deal with Lisboa
Casino Lisboa has selected PacificNet Games Limited as provider of its multi-player electronic gaming machines, with 120 units to be installed in a first phase. Terms of the agreement were not disclosed.

The original Casino Lisboa main complex and 12-story round hotel tower built in the late 1960s by Stanley Ho, Teddy Yip, Yip Hon and Henry Fok, became a Macau icon. A 270-room extension was added in 1991 for a total of 927 rooms. The Grand Lisboa, still under construction, is scheduled to open next year. PacificNet CEO Chairman and Tony Tong said, “The selection of PacificNet Game’s electronic gaming machines by Casino Lisboa marks another huge win for PacGames and further enhances PacificNet’s strong position in Macau’s gaming market.”

Macau Success raises stake in Ponte 16
Macau Success Ltd said it has agreed to purchase an additional 12.25 percent stake in Macau’s Ponte 16 theme park construction project from Joy Idea Investments Ltd for HK$200 million. Upon completion of the deal, Macau Success’s shareholding in Ponte 16 will increase to 49 percent from 36.75 percent, with the remaining 51 percent owned by SJM-Investimentos Limitada, the company said in a statement. Ponte 16 will include a 405-room hotel, a casino with 174 gambling tables, 300 slot machines, shopping arcades and car parks, with an aggregate gross floor area amounting to 126,500 square metres. The first phase of Ponte 16 is expected to be completed by mid-September next year.

Melco IPO raises more than expected
Investors snatched up shares of Melco PBL Entertainment (Macau) Ltd. on the first day of public trading on Nasdaq to the tune of US$1.14 billion – more than originally planned. Melco had filed to sell 53 million American depositary shares at US$16 to US$18 each under the symbol “MPEL” but the 60.3 million ADS in the initial public offering went for US$19 each, according to a statement to the Australian Stock Exchange December 19.

The price gave the joint venture run by the sons of Stanley Ho and Australian media magnate Kerry Packer an initial market capitalization of US$7.3 billion. The company announced it plans to invest US$3.31 billion over five years to build three casino resorts including Crown Macau and City of Dreams and an apartment complex. Earlier, in a filing with the U.S. Securities and Exchange Commission, Melco had said it granted underwriters the option to buy an additional eight million shares to cover potential over-allotments.

New technology for Galaxy
Cash-access products supplier Global Cash Access, Inc. will provide products and services to Galaxy’s StarWorld casino through its wholly owned subsidiary GCA (Macau) S.A., the company announced. These include a proprietary browser-based, full service cash access transaction processing system that handles financial transactions through one device, customer-activated touch screen cash advance terminals, kiosks for slot ticket redemption services.

Another GCA wholly owned subsidiary, Central Credit, will service the casino with gaming credit information, using a proprietary database of gaming patron credit history and transaction data on millions of gaming patrons worldwide. Another product, EDITH (Electronic Debit Interactive Terminal Housing), will allow casino patrons to purchase slot, or ticket-in ticket-out (TITO), vouchers with a debit card and will also emit receipts, the company said.

Galaxy Entertainment sells US$24 million in bonds
Macau casino developer Galaxy Entertainment Group announced the sale of US$240 million worth of zero-interest convertible bonds in part to fund the expansion of its Cotai Strip casino, still under construction. The five-year notes can be converted to shares at a 20 per cent conversion premium, with the strike price ranging from HK$7.44 to HK$9.36 per share, according to South China Morning Post. Ratings agency Moody’s Investors Service responded by placing Galaxy under review for a possible downgrade. The company, which previously issued US$600 million worth of high-yield bonds in December last year, is currently rated five levels below investment grade. Merrill Lynch and JP Morgan acted as placing agents for the sale.

MGM in China JV
MGM Mirage announced December 13 that it is in advanced discussions with the Diaoyutai State Guesthouse in Beijing aimed at creating a strategic relationship to pursue non-gaming business opportunities. The two companies, who hope to conclude their agreement in the first quarter of 2007, intend to create a joint venture to develop luxury non-gaming hotels and resorts globally, initially targeting Mainland locations. The joint venture is expected to develop its own distinctive brand identity, associating “MGM Grand Macau” with “Diaoyutai” to create unique luxury hotel resorts and related facilities. MGM Mirage Chairman and Chief Executive Officer Terry Lanni said, “We believe that the association of MGM Grand and Diaoyutai will provide significant opportunities to build on the strengths of our two organizations and to expand our brand identity in rapidly growing international markets.”

Heritage signs on as junket
Heritage International, a money lender and investment holding company involved for a time in Macau gaming, said it had signed a letter of intent to act as a primary gaming junket provider in the VIP area of a yet-to-be opened Las Vegas-style casino(possibly Venetian Macao) on the Cotai Strip. The company did not name the casino or provide financial details of the tentative arrangement but said it would receive a fixed commission on the volume of VIP chip sales that it purchased on behalf of customers. In addition, Heritage would be entitled to a share of casino profits as a bonus for ensuring the percentage of bets won by the house remained above a certain level.

Win some, lose some
Emperor International Holdings reported that its net profit for the first half ending September 30 fell by 54 percent to HK$204 million from HK$447 million the previous year. Revenues dropped 60 percent to HK$200.4 million, compared with HK$497 million, according to The Standard. Group managing director Vanessa Fan Man-seung blamed the year-on- year decline on the company’s disposal of non-core assets immediately before this interim six-month period. At the same time, the company’s gaming subsidiary Emperor Entertainment Hotel fared much better in the same six months, with revenues soaring a whopping 777 percent over the previous year to HK$593.3 million, resulting in net profit jumping nearly six fold to HK$109.2 million from HK$18.7 million. Fan said the company’s Grand Emperor Hotel in Macau, which opened last January, has recorded an occupancy rate of about 80 percent, and business is “roaring” at the hotel’s Emperor Palace Casino. “We will add four tables to the existing 48 tables in the concourse area by the end of this year and one more VIP room in the coming few months,” Fan told a Hong Kong news conference.

It’s what she didn’t say
Shortly after the detention of disgraced Secretary of Transport and Public Works Ao Man Long, Liu Yandong, vice chairwoman of the National Committee of the Chinese People’s Political Consultative Conference (CPPCC), said that Macau’s future will be promising. Liu showed her support for Macau’s government at a welcome dinner hosted by the government last month and avoided mentioning the case that could undermine Edmund Ho’s second mandate. She said that Macau’s practice since its return to the motherland has been proof of the success of the “one country, two systems” principle. “I saw a prosperous, beautiful and energetic new Macau seven years after my first visit, ” she said, recalling her first tour in Macau in 1999, when she witnessed its return to China. Liu said Macau’s achievements are due to its successful administration under Edmund Ho, with the support of the central government, adding that Ho and his government will usher the region into a more prosperous future with the speeding up of China’s development.

Economist bets on tax revenue
Once its two integrated resorts are operating, Singapore could well afford to cut income taxes even without raising its goods and services tax, one economist suggests. If Macau’s experience is anything to go by, from 2010 when the two IRs here are ready, betting tax revenue could well double to US$2 billion a year – the same as it would from a two-point rise in GST – says Citigroup economist Chua Hak Bin. While Singapore may not see as large an IR windfall as Macau’s, Dr Chua said he would not be surprised if the two casinos produce up to US$2.5 billion in betting tax revenue, up from the current collection of about US$1 billion. Chua, director of Asia Pacific Economic and Market Analysis at Citigroup, estimates that Singapore’s annual GDP growth could get a boost of 0.1 to 0.2 of a percentage point in the next three years, and as much as 0.3-0.5 between 2010 and 2015 when the resorts are ready.

Sun Innovation eyes Macau investment
Sun Innovation Holdings Ltd. announced today that it plans to expand its existing property investment business and has identified a potential investment opportunity in Macau. The company’s Chairman and Chief Executive Officer Michele Matsuda said, “We are very excited to be exploring an opportunity in Macau, as the potential venture would position the Company to enter a new vibrant real estate market.”

Thai companies invest in Macau
Thai companies have been advised to consider greater investment in Hong Kong and Macau, and in particular their service sectors, in a bid to increase business efficiency and gather opportunities from operating in an international environment, The Nation reports. The advice, coming last week from Hong Kong economic specialists and Thai government representatives, suggests that Hong Kong and Macau should be great places for investors – as an open business transaction. The Thai consul-general in Hong Kong, Vichai Varasirikul advised Thai enterprises to consider investment in hotels and restaurants in Macau, since it attracts up to 20 million tourists per year.

Cut the salt
Water supplies for Macau and Zhuhai doubled when the taps were opened on a water diversion project recently. Designed to supply fresh water to the region during salt tides, common in Zhuhai and Macau in winter and spring when water reserves decrease, the project can supply one million cubic meters of fresh water to Zhuhai and Macau every day, according to Zhuhai vice mayor Huo Rongyin.

Sixty percent of the water supply goes to Zhuhai and the other 40 percent flows into Macau, Huo said, adding that the current daily water consumption of the two regions is around 900,000 cubic meters. The 392 million yuan (about US$50 million) project, designed to combat salt tides that have threatened fresh water supplies in the Pearl River Delta in south China, began in January this year. An existing water pump station on Modaomen waterway, the major source of freshwater in the region, was expanded, a 21.2 km-long water pipeline installed and a new reservoir built.

Macau growth rating beats Hong Kong’s
Macau, together with Shenzhen and Beijing, ranked above Hong Kong for growth potential, according to a survey on the competitiveness of Chinese cities. The China Institute of City Competitiveness, which conducted the survey, believes Macau’s top ranking this is due to the rapid growth of its economy backed by the booming gaming sector and, in Beijing, by the stimulation of preparations for the 2008 Olympics, and does not represent a deterioration in Hong Kong’s competitiveness. The survey said overall competitiveness of 289 cities is based on the development of economy, society, environment and culture. Growth competitiveness is based more on growth rate and sustainability.

Where’s their piece of the pie?
More than 600 protesters, mainly union members, marched from the city center to government headquarters on Macau’s handover anniversary, December 20. The marchers chanted against the importation of foreign labor and demanded the government tackle illegal workers. They also carried banners demanding better pay and better public services, including pensions effective at age 60 instead of 65 and free secondary education. Opposition lawmakers joined the march, calling on the local government to handle the problem of graft after a high-profile corruption case brought against former secretary for transport and public works Ao Man-long. The protesters dispersed peacefully after delivering a petition to government headquarters. Holding a banner proclaiming Anti-corruption, protecting people’s livelihood, lawmaker Au Kam-san said hoped the government would handle corruption problems and be more accountable to the public.

Macau embraces IP
Alcatel-Lucent and Companhia de Telecomunicaoes de Macau SARL (CTM) will collaborate on a new IP service. A roll-out of new critical infrastructure will deliver sophisticated Internet Protocol (IP) communications services for CTM’s business and residential customers. The ultimate plan is the realisation of the company’s “Digital Macau” vision. “Digital Macau” is intended to deliver a new generation of communications services that will keep pace with and support the Macau Special Administrative Region’s sustained economic growth.

Next-Generation Network (NGN) services will be provided in four key areas: mobile, broadband, high-speed data services and applications. The demand for advanced multimedia and data services in Macau is expected to increase sharply in the coming years as investments in the tourism and gaming sector increase.

China bank buys B of A HK subsidiary
China Construction Bank has bought Bank of America Corp.’s Hong Kong subsidiary in a US$1.25 billion deal that doubles the company’s business and makes it China’s ninth-largest local lender. The company will operate as China Construction Bank (Asia) Co. Ltd. The deal involves 14 offices in Hong Kong and three offices in Macau, along with US$6.3 billion in assets and US$3.7 billion in deposits.

3G by June
China Unicom Ltd. Chairman and Chief Executive Chang Xiaobing said he expects his company will offer third-generation mobile-phone services in Macau by June. The Macau government said in October it had granted 3G licenses to units of Hutchison Telecommunications International Ltd. and China Unicom, which is China’s second-largest mobile carrier by users.

China Unicom said at the time it was granted an eight-year 3G license for the Code Division Multiple Access 2000, or CDMA2000, standard. Wideband CDMA and China’s locally developed Time Division Synchronous CDMA, or TD-SCDMA, are the other two 3G standards globally. Chang was speaking in Beijing at a conference on the fifth anniversary of China’s accession to the World Trade Organization.

Soccer match-fixing money suspected
Experts and police in Vietnam have estimated that more than US$1 billion was illegally staked on fixed soccer matches in that country, with 200 million transferred to foreign countries and regions, mainly Hong Kong, Macau, and Singapore. Prosecutors in Vietnam have issued indictments in two major soccer match-fixing scandals, and both cases are likely to be heard in court early next year, a justice official said in December.

Traffic jam
Macau, with its 28 square kilometers and slightly more than 500,000 residents, is the world’s fourth most traffic congested city, according to a study by Forbes magazine. The magazine ranked Macau only behind Manila, Cairo and Lagos and ahead of Seoul for its traffic problems. At the end of October, Macau had slightly more than 71,000 registered light vehicles, 5,000 heavy vehicles, nearly 84,000 motorcycles and scooters, and 1,325 bicycles, according to official figures. In terms of public transport, Macau has only bus and taxi services.

Recruitment success
Crown Macau has reported success in its ongoing recruitment drive, naming internationally renowned chef Kristoffer Luczak Director of Kitchens at the property it expects to open in April. Besides Mr. Luczak, more than 8,000 registrations were received for the Crown Macau Information Days held in November at Macau Tower and to date, more than 25,000 online applications have been received for various positions. We have been quite overwhelmed by both the sheer volume and high caliber of the candidates we are attracting in this process, Crown Macau CEO Greg Hawkins said. As a reason for the company’s success, he cited its superior positioning which is proving to be a strong draw for applicants, and also to our online recruitment strategy with round-the clock career office. Crown Macau expects to employ a staff of 3,800, with about 2,800 local hires.

Prison for seven in vote buying case
Seven people were sentenced to prison terms for buying votes for Macau lawmaker Chan Meng Kam, elected to the Legislative Assembly in September 2005, according to a Lusa report. Although Chan escaped trial by claiming legislative immunity, the court handed down the seven sentences of nine months to two years, imposed fines on seven other people and acquitted one for lack of sufficient evidence last month. Still before the courts is another vote-buying case involving Angela Leong, Stanley Ho’s fourth wife. Lawmakers gain seats in Macau’s 29-member Legislative Assembly in one of three ways: seven are appointed by the SAR government, 10 are elected indirectly by civil society groups, and 12 face voters at the polls.

More destinations to choose from
China’s Civil Aviation Administration of, the top aviation watchdog, entered into an agreement with Macau’s civil aviation authority to further open the air traffic market between the mainland and Macau, opening an additional 20 air destinations in Mainland China in 2007, bringing the total to 57. The new destinations include Changchun, capital of Jilin in Northeastern China, Taiyuan, capital of Shanxi in Northern China, Hefei, capital of Anhui in central China, and Luoyang, a booming city in the central province of Henan. Starting midyear, 14 new flights will be added weekly into the routes between Macau and seven mainland destinations like Beijing, Shanghai, Guangzhou, Shenzhen, Chengdu, Kunming and Dalian. There is no limit to flight numbers and aircraft models in other mainland routes to Macau.

Viva Macau takes off
Viva Macau launched its first scheduled commercial flight to the Maldives on December 22. Viva Macau President Ngan In Leng led industry leaders, business partners and the airline’s management team in a send-off ceremony held at the Macau International Airport’s Departure Lounge as Viva Macau flight ZG301, the first ever direct flight from Macau, Hong Kong and the Pearl River Delta to the Maldives left Macau International Airport with more than 200 passengers on board. The maiden flight marks the beginning of the airline’s scheduled commercial operations, although it has been operating charter flights to Haiphong, Vietnam and Phuket.

Air Asia adds another Macau flight
AirAsia added a third flight to Macau from Kuala Lumpur on December 26 in response to strong demand. The airline says it is currently averaging 98 per cent passenger loads for both of its daily B737 flights on the route. AirAsia, currently in the progress of phasing out its B737 aircraft and replacing them with A320 aircraft, will use a larger capacity 180-seat A320 aircraft for the Kuala Lumpur-Macau sector.

Airport expansion
Macau government will begin renovating the airport this year. The airport reported passenger throughput of about five million in 2006, just under the six million passengers it was designed to accommodate. The gap between runways will be filled in to create more parking space and to make space for the growing number of private jets landing in Macau. The cargo hangar is already being expanded, and studies are being done on expanding runways and passenger terminals. Six boarding gates are being planned for a corridor to be built in the south side of the current airport building, which could be equipped with access ramps for airplanes.

Viva teams up with Servair
Viva Macau passengers can now choose their own meals and dine anytime during the flight as they wish. The new international low-fare airline for Macau and the Pearl River Delta, signed an agreement in December with Macau Catering Services Company Limited (also known as MCS, or Servair Macau) for in-flight catering services for all the airline’s outbound flights from Macau International Airport. Food items on board will be sold on a cash-only basis, and Macau pataca (MOP), Hong Kong dollars, US dollar, and Renminbi will be accepted.

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