CASINO

Macau Legend says it’s been promised 350 extra gaming tables outside the cap

TAGs: gaming table cap, Macau, macau fisherman's wharf, macau legend, SJM Holdings

macau-legend-gaming-table-promiseHotel and casino operator Macau Legend Development has announced it will price the shares in its initial public offering between HKD 2.30 (US$0.30) and HKD 2.98 ($0.34). There will be 204m shares released via the Hong Kong IPO and a further 1.84b shares placed internationally when trading starts on June 27. Macau Legend hopes to earn HKD 4.4b ($567m) after the brokers take their cut, and the company knows exactly how it intends to spend the windfall.

On Sunday, Macau Legend CEO David Chow Kam Fai announced a HKD 7b ($902m) redevelopment of its Macau Fisherman’s Wharf property, home of the Babylon Casino, which Macau Legend operates under a sub-concession granted by SJM Holdings. The site revamp will include three new hotels – the Prague Harbour View, the Palace and the Legendale – totaling 1,344 rooms plus an entertainment facility, a yacht club and shopping colonnade, all of which will be open for business by Q3 2016.

The new plans also call for 373 gaming tables, 350 more tables than the 23 mass market tables Babylon currently offers. (Macau Legend’s other casino, the Pharaoh’s Palace, has 123 tables.) Those 350 tables are also more than Macau’s government has stated it plans to award under the confines of the gaming table cap. The cap is currently set at 5,485 tables (although various analysts’ estimates suggest this figure has already been breached) with a fixed growth rate of 3% per year for the next decade. Most – if not all – of the future increases have already been allocated to the mega-resorts going up on the Cotai Strip.

However, Macau Legend’s prospectus states that it submitted an application to Macau’s Gaming Inspection and Coordination Bureau (DICJ) for the new tables back in October. Macau Legend further stated that on Dec. 7, the DICJ had advised “us and SJM in writing” that the table game cap “will not be an obstacle to the request … for operating up to 500 tables in total.” Macau Business Daily quoted Macau Legend co-chairman Carl Tong Ka Wing speaking in New York on Monday, confirming that the tables were “outside the current table cap.” As for a timetable, Chow revealed that as the new Fisherman’s Wharf hotels go up, “we will be supported by some numbers of the tables.”

Macau Legend’s prospectus acknowledges that until the tables are awarded, nothing is written in stone. But Chow suggested the DICJ’s favorable nod was partially intended to address the shift in Macau gaming activity from the older casinos on the peninsula to the shiny new toys on Cotai. Chow said supporting businesses like Macau Legend that are willing to re-invest in their properties would allow Macau “to continue the economic development of the peninsula.” Sure, they’re smiling now, but just wait until Sheldon Adelson discovers someone else has been getting favorable treatment.

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