|By Bill Condie, Evening Standard,
LondonMcClatchy-Tribune Business News
Jan. 26, 2007 - Sir Richard Branson's Virgin Group is close to finalising a deal to open a £1.5 billion casino in Macau, the southern Chinese city that has overtaken Las Vegas as the world's largest centre for gambling.
Branson's negotiations to acquire a 50-acre site come only days before the UK Government is due to announce its controversial licences for up to 17 large casinos in this country.
The Virgin boss said his Chinese venture would provide a "family focus and world-class entertainment" in an effort to attract a younger audience to gaming.
"The sector is growing but existing casinos are light on entertainment," Branson said.
"Existing resorts do not have enough greenery, swimming pools and all-round facilities for families," Sir Richard was quoted as saying.
"It is a massive captive market with 200 million people in the vicinity able to visit Macau. But a lot of people with families do not go."
Virgin Group is close to securing the land in the former Portuguese colony close to Hong Kong but will need either to negotiate a gaming licence or co-brand the complex with one of the six groups currently holding rights to run casinos there.
Branson -- whose company runs online poker and casinos in the UK -- plans a major entertainment complex, three hotels and a casino on the site which can be cross-marketed with Virgin Atlantic flights to the territory.
However, gambling analyst Warwick Bartlett of the Global Betting and Gaming Consultancy said: "I doubt Branson would be interested in UK land-based assets because the connection of travel through Virgin Airlines to, say, Vegas and Macau creates useful synergy. Both venues have lower taxes or lower overheads and are thus more attractive than the UK as an investment."
Macau's gambling market is expected to more than double to $14 billion (£7.1 million) in revenue by 2010 -- the date Branson hopes to open the doors to his new venture.
Branson says he hopes to get the green light for the development "in the next couple of months", and plans to fund it with a mix of Virgin equity and debt financing.
Two of the world's top gaming firms, the Las Vegas Sands and Wynn Resorts, have already built mega-casinos in Macau and other world-class competitors including MGM Mirage plan to pile in this year.
Hard Rock International and Melco Hotels and Resorts plan to develop a hotel and casino at the City of Dreams Casino and Entertainment Resort Complex, now under construction, which will feature three casinos and four luxury hotels and is expected to open in 2008.
Virgin will face even tougher competition from Las Vegas gaming magnate Sheldon Adelson, who opened the Sands Macau in 2004, and Steve Wynn's luxurious but smaller Wynn Macau resort and casino that opened last September.
Branson said: "We have done a lot of market research but ultimately it is about gut-feeling and mine is that a Virgin casino in Macau will be a success."
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Copyright (c) 2007, Evening Standard, London
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