MGM admits VIP defeat in Macau
MGM admits VIP defeat in Macau
In admitting that MGM’s new property in Macau will be mass tables-only, the chief executive of MGM China is merely accepting the reality of the gaming landscape in the territory.
In an interview with a Macau newswire service, MGM China head honcho Grant Bowie said the company’s new HK$24bn Cotai project, due to open in the second quarter of next year, would not have any VIP tables.
He told Macau Television (TDM): “We’ve already made the decision that we’re envisaging opening with only mass tables, and that’s obviously the basis of where we see the future of Macau and that’s the decision we’ve taken at this time and we’re going to walk forward as being a mass-only property.”
MGM’s decision follows the news earlier in the month that Wynn Macau said it would be transferring tables between its existing Macau Peninsular casino and the new Wynn Palace in Cotai after the gaming authorities indicated the company would only be allocated as further 100 tables for the property’s opening later this year.
That decision was confirmed by the Macau government this week. It confirmed that Wynn would be granted follow-on table allocations of 25 more in January next year and another 25 in January 2018. The company had originally applied for 400 new-to-market tables.
MGM China’s new property was slated to open early this year but Bowie said it was delayed after the project encountered unexpected delays. He reiterated the property would have more of an all-round entertainment focus, with a particular focus on technology-enabled products.
He said the premise of the new property was always based on the changed reality of gaming in Macau, where gross gaming revenues across has been on the slide for three years.
In parent company MGM Resorts International’s results for the second quarter, MGM China net revenues for the three months to June fell 19% to $452m while operating revenue was also down 11% to $51m and adjusted EBITDA was down 10% to $119m.
The company said VIP table game revenue was down 33% on the prior-year period with hold percentage down to 3.1% from 3.2%. But the company said margins across the business had improved due to an increase of main floor table games mix and because of cost-cutting efforts.
Bowie prefigured the move to mass tables only at the new Cotai property in his comments on MGM China’s results statement when he said that mass trends in Macau have been strong and that the company was encouraged by the new player sign-ups and quality of play. “Mass gaming and diversification are the key to the future development of Macau,” he added. “We are ready to bring in more innovative and tailored offerings with MGM Cotai. With our quality product and unmatched execution, we are confident that we can capture the growth opportunities of Macau.”
Totally Gaming Says: “At the time of the ‘topping off’ of the Cotai project, MGM China trumpeted the property as being designed to represent a jewelry box with 1,500 hotel rooms and suites, a high-end spa, retail offerings and a dynamic theatre. It said the property was being developed to drive greater product diversification and bring more innovative forms of entertainment to Macau.”