Macau casinos still a good bet despite slump

Hong Kong

GAMBLING at casinos is risky. But even after a 17-month slump, building casinos in Macau still looks like one of the best investments around.

Operators including Sands China Ltd and Galaxy Entertainment Group Ltd have earmarked US$28 billion in spending over the next three years, with new projects that integrate casinos with hotels and entertainment complexes. The aim is to broaden Macau's appeal beyond hardcore gamblers to families and tourists, and placate a government in China intent on reining in the corruption and graft associated with high-rolling visitors to the city.

While the extra expenditure will slow the return on invested capital, or ROIC, the new projects will hand back an average return of 21 per cent three years after opening, according to brokerage CLSA Ltd. That compares with about 50 per cent …