CASINO

SJM Holdings CEO doesn’t see any “miracle” that will end Macau’s slump

TAGs: lisboa palace, Macau, SJM Holdings

sjm-macau-casino-miracleMacau casino operator SJM Holdings says it will request up to 500 gaming tables for its in-development Lisboa Palace, but the company may be setting itself up for disappointment.

SJM originally claimed it would seek up to 700 gaming tables for its $4b Lisboa Palace resort, the company’s first property on Cotai. But on Friday, SJM CEO Ambrose So (pictured) said the company now intended to apply for “400 to 500” new tables when the property nears completion.

Speaking on the sidelines of a European Chamber of Commerce gala dinner, So said Lisboa Palace deserved 500 tables because the property’s plans had designated 95% of its floor space for non-gaming elements, in keeping with requests by governments in both Macau and Beijing for the gaming hub to lessen its dependence on gambling revenue.

However, the two new resorts that opened in 2015 – Galaxy Entertainment Group’s Galaxy Macau Phase 2 and Melco Crown Entertainment’s Studio City – each originally sought around 400 new tables, only to receive 250 tables apiece, despite making the same 95% non-gaming pledges.

Four years ago, Macau sought to put the brakes on the city’s white-hot casino economy by instituting its controversial gaming table cap, which allows for only 3% compound annual growth in the total number of live gaming tables in the market. Despite pleas by the likes of So and other operators, Macau officials have steadfastly maintained that it intends to stick to its cap until 2022, when the last of Macau’s six casino concessions comes up for renewal.

The Lisboa Palace is targeting a Q4 2017 opening, by which time Macau may have finally emerged from its uninterrupted revenue slump, which has outlasted the optimistic projections of some of SJM’s Macau rivals.

A more pragmatic So said it appeared that “there will not be a miracle” to pull Macau’s ass out of the fire, and, given China’s souring economy, suggested that it would be a minor miracle if Macau’s monthly revenue totals can simply maintain their current (depressed) levels.

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