Macau not up to speed yet: U.S. casinos

By Bill Rigby

LOS ANGELES (Reuters) - U.S. companies' massive investments in Macau, the Asian gambling enclave, have yet to pay off and their casinos may take a year to get into their stride, top executives told the Reuters Travel and Leisure Summit this week.

The former Portuguese colony, the only place in China where gambling is legal, has attracted more than $20 billion of investment in the past few years as U.S. giants Las Vegas Sands Corp (LVS.N: Quote, Profile, Research, Stock Buzz), MGM Mirage (MGM.N: Quote, Profile, Research, Stock Buzz) and Wynn Resorts Ltd (WYNN.O: Quote, Profile, Research, Stock Buzz) have piled in, looking to turn the peninsula into the next Las Vegas.

Executives are certain their Macau investments will pay off, but said it will be some months before their operations are running at full throttle and attracting hordes of rank and file gamblers known as the "mass market."

"We would hope that we would see that by late this year," William Weidner, chief operating officer of Las Vegas Sands, told the summit on Wednesday. "It's like driving your new Ferrari: you spin the tires when you first get out the gate. You've got to figure out how to have this thing run."

SLOW START

Las Vegas Sands opened the Venetian Macao -- the world's biggest casino -- last August on the Cotai Strip, an empty parcel of reclaimed land adjacent to the main Macau peninsula, only a short ferry ride from Hong Kong.

A larger version of its popular Las Vegas Venetian casino, complete with canals and rows of upscale boutiques, it has so far struggled to live up to the hype.

For the fourth quarter, Las Vegas Sands posted earnings before interest, tax, depreciation and amortization of $269 million, excluding some development and stock option costs. That is well below the $322 million expected by Jefferies & Co analyst Lawrence Klatzkin, who blamed "a slower than expected ramp-up in Macau" for most of the shortfall.  Continued...