MGM China, the Chinese division of MGM Resorts International, has laid the groundwork on its plans to put up a new resort casino in Macau after signing a land deal in the Chinese gambling enclave.
The deal, according to MGM China Holdings Ltd., involves a 7.2 hectare plot of land in the Cotai district, an area that has given rise, and will continue to, we assume, for all the new casinos in the gambling town.
The total amount MGM China will eventually shell out for the land? $161.4 million with a $56.2 million down payment with eight equal installments for the remaining $105.2 million. Do the math and that’s $13.15 million for each of the eight subsequent installments.
As far as what the casino plans to do with their new land, MGM China is looking into building a casino resort that will carry 1,600 hotel rooms, 2,500 slot machines, 500 gambling tables, and an atmosphere that it describes as a “truly unique MGM experience”.
More importantly, MGM China’s entrance in the Cotai gambling landscape will give it a new establishment that the company hopes will greatly supplement its current establishment, MGM Macau. That, in itself, is pretty important for a company that, according to analyst estimates, has one of the lowest market shares of the six operators in the gambling town.
Having another casino in Macau would not only establish MGM as one of the premier casino resort destinations in the only place in China were casinos are legal, but it would more than likely improve its market shares relative to its competition, including Sands China, which already has three live casinos in the Cotai area with a fourth one already being planned.
There’s no question in anybody’s mind that MGM, just like every other casino operator, is looking to take a slice out of the Macau gambling pie. It’s a pie that was worth $33.5 billion in gambling revenue last year, and with its continued emergence – notwithstanding the small hiccups – Macau is definitely the place to be for casino operators.
While MGM China has not yet revealed how much the whole project is going to cost, company chairman and CEO Jim Murren did tell Reuters a few months ago that it’s going to be nothing short of “epic from a global perspective”.
Only time will tell if Murren will be proven right on that proclamation. But for now, this land acquisition is a step in that direction for his company.