Things are not looking so bright and well for billionaire James Packer’s Melco Crown Entertainment which is part of owned by Mr Packer’s Crown Resorts which opened its first casino outside Macau, City of Dreams Manila, in The Philippines capital in late of year 2014. Casino operator Melco Crown Entertainment recently reported an increase in losses for its Philippines based casino resort in 2015.
City of Dreams Manila posted net losses of P9.14 billion pesos (US$259 million) for the year which has widened by 45 percent as compared to P6.3 billion pesos in the year 2014. However casino revenues grew to P11.9 billion from P300 million and the net operating revenue rose to P13.7 billion from P430 million. Melco stated that this loss was a result of its first full year of operations operating cost and expenses.
Chief Executive Lawrence Ho said that “I think some of the macro problems in Manila are not dissimilar to what we face in Macau, which is kind of infrastructure led issues,”
Though there were high hopes from this facility and even there are big plans and hope from it – this is second of four casinos planned for this Entertainment City which is built on 120 hectares of reclaimed land. Still it is a gamble as whether this facility here in Philippines can compete with other rivals around the region including Australia. This property has three hotels which includes Crown Towers, 1700 poker machines, and 380 gaming tables and cost more than $1 billion to build.
Melco is a big name in the Manila casino market and it owns about two-thirds of the Manila casinos, alongside Filipino developer and billionaire Henry Sy’s belle Corporation.
Company’s Chief Executive Lawrence Ho said in February during the company’s result that while he was happy with the progress of City of Dreams, he hopes that infrastructure constraints will be fixed this year. He further said “I think some of the macro problems in Manila are not dissimilar to what we face in Macau, which are kind of infrastructure led issues,”
Looking at Manila’s credit history he also pointed to the casino operator being cautious of its VIP exposure and then said “I think unlike some of our competitors, we’ve been much more cautious in terms of giving out credit and expanding in the VIP market. Because over the course of Melco Crown’s history, I think we’ve developed a very good independent credit committee system and I think some of the decisions that were given to the credit committee we just couldn’t pass it given what was involved in the credit history involved in Manila,”
