Melco Crown’s new $3.2 billion casino, Studio City, is set to open in Macau soon. And the mega-casino corporation has enlisted the help of Hollywood celebrities to promote the launch.
Leonardo DiCaprio, Robert De Niro and Mariah Carey have all been brought to the Chinese gambling capital to help with the opening.
This is the perfect way to usher in Studio City, which has been designed with many movie elements in mind. The casino resort houses a Batman simulator ride, Art Deco architecture and a figure-8 Ferris wheel.
Despite the excitement surrounding Melco Crown’s intriguing casino, there’s reason to be worried. Studio City was conceived at a time when Macau was booming and it didn’t seem like the money would ever stop flowing. However, times have changed lately since Macau is in the midst of a government crackdown that’s aimed at cleaning up corruption.
Tony Tong, founder of Pacific Financial Services, a consulting firm that advises Asian casinos, told Fox News that many casino companies are leery of Macau due to the government’s involvement.
“With the anti-corruption campaign and the political sentiment, a lot of wealthy people feel going to Macau is very risky. They don’t want to be seen on the radar screen,” said Tong.
Aside from the government crackdown, another problem with Macau is that, as Tong describes, they feel like they’ve been to the former Portuguese colony “too many” times. This has led many of these same high rollers to seek out gambling experiences in other areas like Cambodia, the Philippines, South Korea and Vladivostok (East Russia).
One additional dilemma facing Macau is that junket companies are struggling because the Chinese government has tightened restrictions on lending and money laundering. Junkets have been key to Macau’s rise because they recruit VIPs from China’s mainland – where casino advertising is illegal – lend them money, and collect debts when the high rollers return home. But now, some junkets are even thinking of getting out of the business since they are so restricted.
The Neptune Group is one such company. as they’ve taken a $100 million loss this year. The experience has Neptune thinking of getting into the lending business due to the government’s actions.
Going back to Melco Crown, their casino enters the market at a tough time – especially since they were only granted 250 of the 400 gaming tables that they wanted. So it will be interesting to see how Studio City fares in what’s become a less-lucrative market.
