The challenges facing Macau’s casino sector are well documented, but the big players are backing the gambling destination with investment and development continuing to flow.
The latest launch is the Studio City Casino complex from Australian casino operator Melco – headed by billionaire James Packer (currently dating Mariah Carey who was on hand for the launch).
Costing USD$3.4 billion, this is a project where no expense has been spared and that was reflected in the resorts launch event – a party which reportedly cost USD$150 million.
The Audition
One of the features of the launch event was the world premiere of a short film called The Audition. Billed as the most expensive short film ever produced, The Audition stars Robert De Niro, Leonardo DiCaprio, Brad Pitt, and Martin Scorcese. The short film was produced by James Packer’s film house Ratpac Entertainment – a joint venture that he has established with film producer Brett Ratner. It is estimated that the short film cost $100 million to make and is set in Macau, Manila, and Japan, focusing on Scorcese casting the lead role of a casino owner (in a fictional movie) with De Niro and DiCaprio competing for the role while Pitt provides the plot twist.
Each of the four stars apparently pocketed USD$10 million each for their part in the 16 minute film. Mariah Carey also made an appearance in the short film and reportedly was paid USD$1 million for her performance.
The resort
The resort includes a lavish 1,600 room hotel that includes lagoon swimming pools in a Riverscape water world, the rooms are adorned with stunning artwork, and a ferris wheel that is 130 metres high – suspended between the casino’s two towers. There’s a lot more to the resort than just the casino – it is a total entertainment complex that also includes a Batman 4D simulator, plus a performance arena that will be hosting big-name international acts with Madonna already confirmed to perform.
The profitability outlook for Studio City
It will be fascinating to watch the performance of Studio City amid fears of oversupply in the Macau casino sector. Macau has been experiencing a decline in revenue over the last 18 months with tighter restrictions from mainland China meaning a sharp drop in the volume of visitors to the casinos of Macau.
One aspect of regulation in Macau that has been causing concern for casino operators is the restriction on the number of gaming tables that new casinos can instal – Studio City was not able to instal the full number of gaming tables that it had planned to due to regulatory restrictions.
What next for Melco?
The next project for Packer and his Melco company is a new casino that will be constructed at Barangaroo in Sydney, Australia. Packer is quoted as saying that the Barangaroo casino will be the most important project of his live and that it will be the most expensive building ever constructed. On current schedule the new casino will be opening in December 2020.
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