James Packer will be all smiles if his Macau venture keeps making him this much money. Picture: Dan Himbrechts Source: Supplied
AUSTRALIAN billionaire James Packer is set to move up the scale of the wealthiest people on the planet.
Currently rated 198th on the Forbes magazine list of the world's richest people, Packer is set to move up the rich list following the announcement of higher than expect casino profits in the world’s most profitable gaming location, the Cotai strip in the Asian island colony of Macau.
Packer’s Asian casino interests will push him up the line closer to neighbouring Macau casino operator and Forbes lister, Sheldon Adelson.
Packer’s Macau casino company, Melco Crown, posted a higher-than-predicted profit, lighting up wealth analysts Merrill Lynch Global Research, which has urged investors to "buy, reiterate Buy" the company’s shares.
This is coupled with the entire Macau gaming market recording an all-time record profit for the month of March of close to $4 billion.
"The future is bright," said Macau gaming expert, former Australian lawyer, David Green, "Macau has just recorded a new monthly all-time record for gross gaming revenue of $4 billion.
"If it keeps on growing at a rate of ten to 12 per cent, it’s going to be huge.
"Packer’s Melco Crown is currently third or fourth of the Macau operators. Put it this way, his investment is paying off in spades."
In a wave of new casino mega-resorts, Melco Crown is due to open a second casino on Cotai, the reclaimed strip of land in Macau developed in 2006 by Sheldon Adelson.
The Cotai development transported Adelson, a one-time taxi driver, into the ranks of the mega-wealthy. Adelson is now rated by Forbes as 15th richest in the world, with a $26.5 billion fortune.
Crown Macau casino in Macau, owned by James Packer's joint venture Melco PBL. Source: Supplied
Mr Green, a former director of PricewaterhouseCooper’s Macau Gaming Practice, said James Packer’s Australian casino interests – which may include Sydney’s Barangaroo, pending NSW Government and Independent Liquor and Gaming Authority approval – will represent only a small percentage of his expanding gaming empire.
"Australia is a small market, about $2.3 billion a year and that won’t change much, unless Barangaroo can dress itself up as something exclusive that you don’t already get in the casino market."
Australia currently represents about 2 per cent of the market for casino junkets, the luxury free trips provided for high roller investors.
Mr Green said Barangaroo would struggle to lure wealthy Chinese high rollers away from Macau.
China, where casinos are illegal, was the world’s biggest gambling market, "with some pretty heavy gamblers coming from Taiwan, South Korea, Japan and Thailand".
"What large gamblers are interested in is benefits, such as the loss rebates which casinos pay directly to players," Mr Green said.
"When you’re gambling with millions a higher percentage rebate makes a huge difference."
Mr Green said Barangaroo would lure gamblers by making itself the "Lizard Island" of casinos, where wealthy Chinese gamblers enjoyed an "exclusive domain" and enjoy "privacy, exclusivity and anonymity".
"They would want to be away from the hordes of the general public," he said. "That’s how I see Barangaroo working."
James Packer has indicated his Barangaroo casino proposal which will feature a number of high-roller gaming "salons", multiple "signature" Asian-focused restaurants and other resort facilities.
Melco Crown’s 2012 financial year profit of $138.5 million was 13 per cent higher than predicted, according to the April 2013 Merrill Lynch Global research newsletter.
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