* Casino resort to cost $2.5 bln, to have 1,600 hotel rooms
* New casino not likely to open before end of 2015-analysts
HONG KONG, Oct 18 (Reuters) - MGM China said it has received approval to build its $2.5 billion dollar casino project in the former Portuguese colony of Macau, the world's biggest gambling market.
In a statement to the Hong Kong stock exchange on Thursday, the Macau casino unit of U.S. gambling giant MGM Resorts , said it will pay the Macau government 450 million patacas ($56.4 million) as an initial instalment to lease the land for the new project.
The total cost of the lease is 1.3 billion patacas.
Macau's gambling industry, where revenues in 2011 dwarfed neon rival Las Vegas more than five times at $33.5 billion, has provided a much needed overseas release for U.S. companies struggling in a more lacklustre American market.
The site on reclaimed land called Cotai in Macau, the only place in China where casino gambling is legal, will include 1,600 hotel rooms, 500 gaming tables and 2,500 slots.
The new property is not expected to open until the end of 2015 at the earliest, giving MGM China only five years to recoup its investment before its licence expires in 2020, analysts said.
MGM is the latest of the six licensed casino operators in Macau to get approval for a new outlet. Casino development has previously focused on the main peninsula, where MGM has a casino, but the reclaimed Cotai has created new opportunities.
Sheldon Adelson, the U.S. casino mogul of Las Vegas Sands and Sands China, has his gondola filled Venetian casino on Cotai. In September he opened his latest property on the developing strip of land.
Wynn Macau, owned by Las Vegas tycoon Steve Wynn, and local player Galaxy Entertainment are also building new properties on Cotai.
Finding labour to staff the construction project will also be a challenge for MGM, analysts said, due to Macau's limited pool of suitable labour and the casinos competing to employ them.
While MGM's approval gives the company an edge against local player SJM Holdings, which has also been waiting for government approval, MGM's land space is smaller than its competitors. Wynn's plot is nearly three times larger at 51 acres.