On Tuesday, MGM Resorts International finally opened its $3.4 billion casino resorts in Macau, a venture that is latest big bet by foreign gaming operators on the Chinese gambling haven. MGM Cotai, the casino, opens after months of delays and will be the new highlight if Macau’s Cotai Strip with its 1,390-room hotel-casino offering. Also, with the Chinese Lunar New Year just around the corner, the casino is expected to draw in massive crowds within the next few days of its launch.
MGM Resorts International is one of the six licensed casino operators in Macau which is the only place in China where the citizens can gamble legally. However, MGM’s operational license in the region is due to expire in 2020 alongside SJM Holdings’ license. The other four operators, that is, Wynn Macau, Sands China, Melco Resorts and Galaxy Entertainment, on the other hand, will be able to operate normally until 2022 when their licenses expire.
While Macau authorities are yet to provide more information regarding the renewal of the licenses, the launch of the new MGM Casino in Cotai is anticipated to hasten the process in one way or the other. In fact, Grant Bowie, the chief executive of MGM China, MGM Resorts International’s Macau unit, believes that the launch was critical for the concession renewal process.
“Concession renewals will be determined on diversifying Macau into more than just a gaming town,” Bowie told a news conference.
Riding the Revenue Boom?
As the license expiration dates draw nearer, MGM Resorts and other operators have worked tirelessly towards diversifying their non-gaming offering in a bid to pacify Beijing which has grown more wary about Macau’s acute dependence and reliance on gambling – 80 percent of revenue in Macau is derived from gambling.
At the moment, Macau gambling revenues are on the upswing having risen by 19 percent in the last year to $34 billion following years of declining fortunes as a result of wealthy Chinese gamblers shying away from the casinos to avoid being probed by an extended corruption campaign by President Xi Jinping. These Chinese high rollers who are making a come-back to the casinos helped to propel Macau’s rapid transformation into what is now considered to be a global gambling powerhouse.
Analysts are anticipating that MGM Cotai will open with about 177 mass gaming tables. VIP gaming is expected to be handled by middlemen junkets that are likely to go live by the end of the first half of year alongside MGM Resorts’ luxury mansion villas.