The Macau government Wednesday gave the long-awaited green light to U.S. casino magnate Steve Wynn's expansion plans in the world's biggest gambling center.
The approval will give the chief executive of Wynn Resorts Ltd. (WYNN) his first toehold in the Chinese territory's up-and-coming Cotai area, already home to mega resorts such as rival Las Vegas Sands Corp.'s Venetian Macao.
In a statement Wednesday, Mr. Wynn called the development "the single most important project in the history of Wynn Resorts."
The Macau government said Wynn's land was designated for a five star hotel, gambling space, retail, dining and shopping areas as well as a spa and night club.
Since China opened up the former Portuguese colony to foreign investment in 2002, companies have spent billions building more than a dozen casinos. The payoff was $33.5 billion in gambling revenue in 2011, up 42% from the previous year and five times that of Las Vegas.
But until recently the Macau government had stopped approving new projects, saying it wanted to encourage more sustainable development.
The project had been estimated by analysts to cost around $2.5 billion, but some have recently said they believe it will end up costing significantly more--possibly up to $4 billion.
Deutsche Bank analyst Karen Tang said she expects earnings before interest, taxes, depreciation and amortization, or Ebitda, from the Cotai project will be around US$625 million in 2016, the first full year of operation and the project is worth $5.0 per share.
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