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Playboy springs into Macau

Thursday 26 July, 2007

Playboy Enterprises Inc., publisher of the most widely read men’s magazine, will open a 40,000 square-foot entertainment complex, including gaming facilities and bunny-suited waitresses, in Macau in late 2009.

Playboy Mansion Macao will include dining, entertainment and retail shops, company Chairman and Chief Executive Christie Hefner said in an interview in Hong Kong today. It will be part of the Macao Studio City complex, with the gaming operations run by casino operator Melco International Development Ltd., Hefner said in another interview today in Macau.

Billionaire Stanley Ho’s gaming monopoly ended in 2002 when the government awarded licenses to five other operators in the city, the only place in China where casinos are legal. By this year’s first quarter, 25 casinos were operating in the 26 square- kilometer (10 square-mile) territory, creating concern the industry may be starting to get crowded.

“I am less bullish about the ability of demand to soak up the capacity that’s coming on line for both retail and hotels,” said Peter Drolet, a Hong Kong-based analyst at UOB Kay Hian Pte.

Macao Studio City, a $2 billion joint venture between Hong Kong-listed ESun Holdings Ltd. and partners including Silver Point Capital LLC, is next to the Lotus Bridge, which will link Macau and the mainland Chinese city of Zhuhai. It will include a film studio, a million-square-foot shopping mall, and gaming and convention facilities.

Shares of Melco surged 6.8 percent to HK$11.60 a share in Hong Kong today, the biggest gain since April 3.

Macau’s Economy

“Macau has vast growing power as a travel destination, with the number of visitors expected to double between 2006 and 2011,” said Hefner, daughter of Playboy founder Hugh Hefner. “We will look for the most beautiful, personable women from Asia and the United States” to hire as Playboy Bunnies, she said.

The company may also use Macao Studio City to produce videos or TV shows, she said.

It was “too early” to disclose how much will be invested in Playboy Mansion Macao and how much gaming will contribute to its revenue, Hefner said. She also didn’t say how much Playboy will pay Melco to run the project’s gaming operations.

Executives of Melco, controlled by Stanley Ho’s son Lawrence Ho, weren’t immediately available for comment.

Macau’s economy grew 16.6 percent last year, compared with 6.9 percent in 2005 and 28.4 percent in 2004, the year the city’s first foreign-operated casino began operating.

Las Vegas

Playboy’s licensing unit benefited from the October debut of a gaming and cocktail lounge at the Palms resort in Las Vegas, the world’s first Playboy Club since a location closed in 1991 in Manila. The division will sign a deal to open a second venue this year, possibly in London or Macau, and increase its full-year profit and sales by as much as 25 percent, excluding artwork sales, Playboy said May 8.

Macau, with a population of 500,000, is the closest location for the 1.3 billion people in China to gamble legally in casinos.

When billionaires Sheldon Adelson of Las Vegas Sands, the world’s biggest casino-operator by value, and Steve Wynn entered Macau after the four-decade monopoly of Stanley Ho ended, they brought some of the pizzazz that’s made their base in Nevada’s desert famous.

Adelson, Wynn Resorts Ltd., and Kirk Kerkorian of MGM Mirage are building new resorts featuring artificial canals, singing gondoliers, luxury shopping malls and celebrity chefs, in contrast to the smoke-stained walls and frayed carpets of Ho’s decades-old flagship, the Hotel Lisboa.

Hugh & Marilyn

Gambling revenue in the former Portuguese colony surged 22 percent to $6.95 billion last year, surpassing the Las Vegas Strip, as it added seven new casinos, bringing the total to 24. Macau had 2,762 gaming tables in the year to Dec. 31, double that of the year before, according to the Web site of the city’s Gaming Inspection and Coordination Bureau.

The city’s gaming revenue may reach $8 billion in 2007, mainly driven by the scheduled opening of Las Vegas Sands’ Venetian Macao in the middle of this year, Jonathan Galaviz, a partner at Globalysis Ltd., wrote in a report in August. “Macao” is the Portuguese name for the city.

Adelson, chief executive officer of Las Vegas Sands, said he recouped his $260 million investment in Macau in eight months after opening the Sands Macao in 2004, the first U.S.-owned casino in the city.

Playboy is the world’s best selling men’s monthly magazine with paid circulation in the U.S. of 3 million, larger than that of Esquire, GQ and Men’s Journal combined, according its Web site.

The magazine was founded by Hugh Hefner in 1953 with U.S. actress Marilyn Monroe in the inaugural edition as “sweetheart of the month.” In the second issue, Hefner introduced the bunny logo, which underpins the Playboy brand.

An Indonesian court in April rejected a case filed against Playboy Enterprises’ local editor Erwin Arnada because the prosecutors failed to file charges under an eight-year-old law meant to regulate the media. Protests against the magazine in the nation with the world’s largest Muslim population led advertisers to withdraw from backing the magazine, which sells 40,000 copies a month.-Bloomberg

mm comment-I visited Macau in 2001 & can see how things have taken off since then. At that time, it was a Chinese destination for horse racing, which has now developed into full-fledged gambling. When I was there, the casinos, which were located right near where the ferry boats from Hong Kong docked, were pretty shabby. I rented a motor scooter & explored the whole island & found a few swanky resorts on the other side of the island. Being remotely located to the main city, I wonder how they work into the casino scene. fyi-Macau is a “Special Economic Zone” within China, much like Hong Kong. Interestingly, Macau is also a former Portugese colony so it has a bit of a European feel, with winding cobblestone streets, etc. It was a center for furniture production in Asia, although I would bet at least some of that has moved to the mainland.

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