Galaxy benefits from woes hitting Macau casino rivals Sands and Wynn
Macau gaming firms Sands and Wynn troubled by USprobes and lawsuits
For casino mogul Sheldon Adelson, what happens in Macau does not always stay in Macau as US courts probe his operations in the world's biggest gaming hub. The scrutiny has investors favouring local rivals.
Galaxy Entertainment Group, a Macau gaming operator owned by Lui Che-woo, has surged 75 per cent in the past 12 months, more than double the 31 per cent gain in Adelson's Sands China. That has helped put Lui among the world's 100 richest people for the first time, according to the Bloomberg billionaires index.
Adelson and US rival Wynn Resorts have invested more than US$10 billion in Macau and now count on the territory for most of their profit.
The two helped expand the industry after the former Portuguese colony opened to global companies in 2002 and were rewarded by investors as Wynn Resorts' share price jumped almost ninefold since then and Adelson's Las Vegas Sands has added about 60 per cent since its initial public offering in 2004.
"The lawsuits at Sands or Wynn have been going on for some time and we've already priced in that risk by cutting our exposure," said Alex Au, a managing director at Richland Capital Management. "We like Galaxy instead."
Sands was sanctioned last week by a Nevada judge who said the company and its Sands China unit deceived the court concerning evidence sought by the former head of its China operations in a lawsuit over his firing.
Wynn's Macau operations also are under investigation by the Securities and Exchange Commission and face lawsuits in Nevada courts, underscoring the difficulties foreign casino operators have to face as they navigate both regulatory regimes.
Sands China had followed regulations in both Macau and Las Vegas, chief executive Edward Tracy said last month. A spokeswoman for the company in Macau declined to comment on the probe.
Wynn Resorts is under Securities and Exchange Commission investigation over a HK$1 billion donation last year to the University of Macau. Former director and largest shareholder Kazuo Okada also has sued Wynn over the company's unilateral redemption of his shares.
A spokeswoman for Wynn declined to comment on the investigation.
