HONG KONG: Macau casino big-hitter Lui Che-woo says he sees light at the end of the tunnel for the embattled gambling enclave, although the days of high rollers are gone.
The former Portuguese colony has struggled to recover its footing after coming under pressure from Beijing to diversify away from gambling in 2014 as part of a corruption crackdown by China’s President Xi Jinping.
That punched a hole in the VIP market that had propped up Macau’s gaming revenues, which have nosedived. Takings were also hit by a slowdown in the Chinese economy.
But the slump appeared to come to an end in August, with a modest rise in gaming revenues of 1.1 percent—the first increase for 26 months—as casino bosses try to lure mass market tourists to fill the rooms of a host of new mega-resorts.
Some analysts say the August rally, though modest, is a sign the new approach is working.
Veteran Lui, 87, who founded Hong Kong-based casino firm Galaxy, says he now envisages stable growth for semi-autonomous Macau, the only part of China where gambling is legal.
Speaking to Agence France-Presse at his waterfront Hong Kong offices—wearing his trademark flat cap and suit—Lui says the only way forward is the “mass market” approach, adopted by his new casino resort and its rivals on Macau’s Cotai strip.
“Phase two” of Lui’s existing Galaxy casino opened last year, boasting a sprawling rooftop water park complete with river rapids.
Since then, Melco Crown’s Studio City, the Wynn Palace and Sands’ The Parisian have joined the fray with restaurants, shows and family-friendly attractions—as well as slots and gaming tables.
“We are going towards the direction of mass market clients, our confidence in this is absolute,” said Lui, who is worth $8.2 billion according to Bloomberg Billionaires.
He says there has been healthy growth in the number of middle-class clients, despite China’s downturn.
But despite his confidence, Lui stops short of believing there will be a return to the heady days of VIP-fuelled growth, which helped Macau overtake Las Vegas in terms of revenue in 2002.
“I don’t have enough courage to say it can be bigger than the VIP market—what I can say is that we are optimistic,” Lui said.
Lui is planning “phase three” of his Galaxy resort which will include a high-tech theme park.
Time for peace
Galaxy comes under Lui’s flagship company K.Wah, set up in 1955, a multinational property developer and entertainment conglomerate.
There are nerves in Macau as those concessions come up for renewal from the government in 2020 — though Lui says he is confident authorities will not remove licenses as casinos commit to the mass market approach.
In the past two years the octogenarian father-of-five has also been advertising his philanthropic credentials.
Next week sees the awarding of the inaugural $7.74 million Lui Che Woo Prize, for people and organizations that “make the world a better and more sustainable place”.
The winners of this year’s prize include former US president Jimmy Carter and French NGO Medecins Sans Frontieres.
Lui says the harsh experiences of his youth inspired him to set up the prize.
Having moved to Hong Kong from mainland China as a four year old, he remembers the Japanese marching into the then-British colony in 1941.
“When the Japanese soldiers passed by, you had to stop moving and bow, or else they would beat you up,” Lui said.
“I feel that we should be more peaceful.”