Managing Asia

Managing Asia

Macau's casino tycoon: I don't gamble

Galaxy Group: China slowdown won't hurt us

Lui Che Woo, founder and chairman of Galaxy Entertainment, runs six casinos in Macau but the 84-year-old billionaire told CNBC that gambling isn't really his cup of tea.

However he knows what makes casino patrons tick.

"When I first started, many people viewed gaming with a negative connotation. I wanted to change that so we added non-gaming elements to our facilities," Lui told CNBC's "Managing Asia".

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"After phase two of our development is completed, 95 percent will be non-gaming components such as cultural performances, shopping and exhibitions," he said, referring to the Galaxy Macau, a $2 billion casino and hotel resort on the Cotai Strip, which will see new amenities open in 2015.

This is how Galaxy Entertainment, Macau's second-biggest gaming operator, plans to increase its share in the growing gaming market, which saw casino revenue jump 19 percent to $45 billion in 2013.

"Gambling is not the only thing on our minds. [Galaxy Macau] will become more of a hub for relaxation and tourism," Lui elaborated. "Moving forward, we'll also focus on attracting mass-market customers."

Lui Che-woo, chairman of Galaxy Entertainment Group Ltd.
Jessica Hromas | Bloomberg | Getty Images

Targeting China's middle class

This marks a shift from its StarWorld Casino, which opened in 2006 and caters to gamblers betting as much as $250,000 a hand – a logical step as the industry faces regulatory hurdles.

A raft of curbs – government limits on gambling tables, a clampdown on unauthorized debit card use, a smoking ban on casino floors and transit visas restrictions – threaten to strain tourism numbers.

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In addition, the lucrative VIP segment, made up mainly of high-rollers from the mainland, is shrinking amid sluggish growth and an anti-graft crackdown in China. The segment once accounted for nearly 80 percent of revenues but has been eclipsed by the mass market sector of middle class Chinese. The middle class now accounts for over a third of Macau's gaming revenues, according to Reuters.

"The Chinese have always enjoyed gambling and Macau is the only place in Greater China where gambling is legal. So I believe the government understands that there has to be a place for it," Lui said.

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The switch into gaming

Lui, who also founded K. Wah Group – a multinational conglomerate engaged in properties, entertainment and hospitality – took a huge gamble to break into the casino business in 2002.

"If you don't take risks, you won't be able to do anything," the octogenarian said. "I was confident I could use my experience to change and improve the way Macau worked."

Together with Sheldon Adelson, chairman and CEO of Las Vegas Sands, Lui won one of the three gaming licenses put up by the government. However, a year later, the partners went their separate ways.

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"They had their own direction and they looked down on us, thinking we didn't have what it took to help them. On my end, I felt that we were Chinese and we had our way of doing things," he said.

The end of the partnership did not spell the end of Lui's venture. A blowout year for Macau's gaming sector in 2013 helped Lui scaled the ranks of Asia's rich list. With a net worth of $21.2 billion he is Asia's second-richest man. However, Lui said wealth does not hold the key to happiness.

"If I make money, I'm happy. Even if I lose money, I'm happy," Lui said. "There is a Chinese saying: 'If there's no one sick at home and no creditors outside your home, that's when you'll have a peace of mind.' Numbers will only trouble your mind."

— Reported by Christine Tan; Written by See Kit Tang