A palace for losers

CASINO gamblers hate two things. One is losing. The other is understated decor. There is no risk of the latter at the Galaxy, Macau's latest shrine to excess, which opened on May 15th. Its owners, Galaxy Entertainment, a firm controlled by the family of Lui Che-woo, a Hong Kong cement magnate, claim to have slapped enough gold leaf on its fixtures to cover 87 football pitches. To recoup the $1.9 billion it cost to build the Galaxy, it will have to attract a lot of losers.

Macau, a former Portuguese colony known for gambling and other vices, was handed back to China in 1999. By this accident of history, it became the only place in the People's Republic where casinos are legal. Stanley Ho, an ageing local tycoon, lost his monopoly over the business (though his family still controls or has fingers in roughly half of it). Glitzy Western casino operators arrived to challenge his bedraggled gambling dens with their spit-stained carpets. The Sands opened in 2004, the Wynn in 2006 and the Venetian in 2007, each fancier than its predecessor. The Galaxy tops the lot. What will come next?

Possibly not much. Granted, the Sands hopes to open an even bigger casino next year, and three out of the four other operators (Wynn, MGM and Mr Ho's SJM) have ambitious plans. But there are new constraints. Macau's government, perhaps at the urging of Beijing, recently capped the number of gambling tables in Macau at 5,500, approximately the current number. Another 3-4% will be allowed annually, split between all the operators. That hardly allows room for mega-projects—the Galaxy alone added 450 tables.

Perhaps the government will relent. Demand shows no sign of slacking. From December, the three-hour bus ride from Guangzhou to Macau will be replaced by a 47-minute trip on a high-speed train. Eager punters from the Chinese interior will suddenly find temptation nearer. Aaron Fischer, an analyst with CLSA, a broker, predicts that gambling revenues in Macau will rise by 35% this year, 25% next year and 20% thereafter, while the supply of new tables will rise only gradually. Fat profits beckon.

The greatest threat to Macau's licence to print money is that the Chinese government may grow jealous. It has in the past limited the number of visas it issues for mainland visitors to Macau. And there are rumours that it may allow casinos on other patches of its territory, such as Hainan, an island province in the south. Casinos are popular, pay a lot of taxes and please well-connected developers. It would hardly be a surprise if the government in Beijing decided to grab a piece of the action.