Clampdown by the Chinese authorities
The Louis XIII casino and hotel is being developed on Macau’s Cotai strip which is home to many of the territory’s main casinos most of which are run by leading international casino operators such as Las Vegas Sands (Venetian Casino Macau), the Wynn group, MGM, Melco Crown entertainment and also the long established Macau group SJM Holdings belonging to Stanley Ho. Stephen Hung’s Louis XIII casino will need to come to an arrangement with one of Macau’s existing casino licence holders but so far he hasn’t announced which one will work with him. The present economic climate in Macau isn’t very conducive to the opening of a luxury casino hotel aimed at China’s top 1 per cent of earners. VIP players from mainland China are tending to avoid any show of wealth at the moment as the Chinese authorities’ crackdown on corruption. It had been thought that the campaign would ease up soon but it is now showing signs of being prolonged.
Macau’s casinos feeling the loss of VIP players
Billions of dollars have been wiped off the share prices of most of Macau’s main casinos. The past six months have seen decreasing revenues from most of the administrative area’s casinos. Against this background, Stephen Hung had hoped that selling shares in his sumptuous Louis XIII casino would raise about 3 billion Hong Kong dollars. The sale raised just over half of this sum. The existing casinos in Macau,the only area in China where gambling in casinos is permitted, have all suffered from fewer VIP players visiting their establishments. Chinese high rollers do not wish to attract the attention of the Chinese authorities which have stepped up measures to stem the flow of illegal money passing through some Macau casinos. The Chinese leadership believes that several Chinese officials have managed to transfer illegal money through Macau. The lack of VIP gamblers means that Macau could face several more months of dropping casino revenue which doesn’t bode well for the Louis XIII Casino that will depend on attracting high rollers when it opens in 2016.