CASINO

Cotai casino to double MGM profits; Macau hints at gaming table cap flexibility

TAGs: Francis Tam Pak Yuen, gaming table cap, Macau, MGM China, MGM Resorts, table cap

macau-gaming-table-cap-flexibilityWith MGM China having officially received the okay to construct its second Macau casino, MGM Resorts International CEO Jim Murren is clearly feeling his oats. Macau Business reported that Murren said MGM China’s profits would “more than double” once the new resort casino was up and running on the Cotai Strip in 2016. (MGM? Profits? Surely you jest?) MGM China CEO Grant Bowie said he hoped to make an announcement on the Cotai construction timetable within the next six to eight weeks. While 2016 remains the publicly stated opening date, Bowie says “there’s a fairly significant overhang of projects [versus] resourcing,” a bottleneck with which all of Macau’s six casino concessionaires must reckon.

MGM’s new venue will reportedly devote 85% of its total floor space to non-gaming facilities, which is a no-brainer, given Macau’s stated intention to award increasingly scarce gaming tables to new venues “according to the non-gaming components.” Macau’s 5,500 gaming-table cap – which, at the end of September, sat at 5,497 – is set to rise a mere 3% per year until 2023, meaning a total of 1,900 new tables would be allocated during that span. But MGM’s own PR on its new Cotai resort states it plans to offer 500 tables and Sands China COO David Sisk said on Wednesday that he expects 200 more tables when the new phase of Sands Cotai Central opens later this quarter. With the rest of Macau’s concessionaires working on their own Cotai projects, it doesn’t take a Stephen Hawking to figure out someone’s going to be disappointed.

However, Macau officials are dropping hints that there may be some flexibility in their table game plan. On Wednesday, Macau’s Secretary for Economy and Finance Francis Tam Pak Yuen told the Standing Committee for Coordination of Social Affairs that the government “has the room to assign further tables to recently-opened casino-resorts where large investment is made and which fit its non-gaming development focus.” Macau Business Daily reported that Tam said the government would “follow up and see if we can assign these big Cotai casinos a few more tables,” but Tam cautioned that “the addition of tables will not turn out to be in hundreds.” Tam said Macau was moving slowly in announcing its table allocation “because we have to consider all the new projects in Cotai and give out the approval as a whole.” Tam also announced that in 2013 Macau would adopt standardized criteria across all its casino operators to determine what qualifies as non-gaming elements, which would then be used to allocate tables accordingly.

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