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Galaxy claims 22pc share of Macau gaming market

Galaxy Entertainment Group, which runs five Macau casinos, said its share of the enclave's booming gaming market reached a record 22 per cent last month, second only to Stanley Ho Hung-sun's Sociedade de Jogos de Macau (SJM).

Galaxy's casinos, including the newly opened StarWorld hotel and four franchise-style 'city clubs', won HK$1.29 billion of Macau's HK$5.86 billion gaming revenue for the month, said the company held by the family of property and construction tycoon Lui Che-woo.

The HK$3 billion StarWorld, which opened on October 19 as Galaxy's first fully owned and operated property, averaged daily gaming winnings of about HK$70,000 per table.

Its 205 tables raked in about HK$450 million in revenue last month, accounting for about 8 per cent of the Macau market.

'While the overall market share number is impressive, what really matters to Galaxy is StarWorld's market share,' UBS analyst Grant Chum said. 'StarWorld is the key driver to Galaxy's profitability at this stage.'

The company said rival operators' market shares for last month were 46 per cent for SJM, 18 per cent for Las Vegas Sands and 15 per cent for Wynn Resorts' newly opened casino. The figures are rounded estimates and do not add up to 100.

Galaxy's business model for city clubs, introduced in July 2004 with the launch of the Waldo casino, relies heavily on outside gaming operators and marketing agents. For the six months to September, Galaxy's margin on HK$2.2 billion in casino winnings from city clubs was only 4.2 per cent.

Executives, while declining to give specific figures for StarWorld, suggested the new resorts' margins would be significantly higher.

'In 2005 and 2006, when our city clubs were still the dominant force, our margins were of course smaller. We had to share [revenue] with others,' deputy chairman Francis Lui Yiu-tung said yesterday.

'But StarWorld is 100 per cent [run] by ourselves and we would expect that our margins would be very similar to those of Wynn and Sands.'

Sands Macao averaged an operating margin of 31 per cent last year, based on quarterly data from its filings with the New York Stock Exchange.

StarWorld operates 169 mass market gaming tables and 36 VIP tables, with 400 more tables installed at Galaxy's city club casinos. The company will add eight tables at StarWorld for high rollers in time for the Lunar New Year.

A separate high-stakes gaming area for 'mid-rollers' is slated to open on March 1 with 18 tables and a space for an additional 12.

Executives said hotel occupancy at StarWorld averaged 85 per cent last month, compared with a territory-wide average rate of 68 per cent for five-star hotels in the year to November.

Galaxy's shares, which have climbed 20.2 per cent this year, closed 0.11 per cent higher at HK$8.75 yesterday.

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