GGRAsia – MGM Cotai launch pushed back to 2H17: firm

MGM Cotai launch pushed back to 2H17: firm

Jan 18, 2017 Newsdesk Latest News, Macau, Top of the deck

Casino operator MGM China Holdings Ltd on Tuesday said the opening of MGM Cotai (pictured), its under construction new resort in Macau’s Cotai district, would be moved to the second half of 2017. It had previously mentioned a second-quarter launch.

“Given the complexity of the design of MGM Cotai and the company’s commitment to a successful opening that reflects the demands of the current market, the expected opening time of MGM Cotai will be adjusted from the second quarter of 2017 to the second half of 2017,” MGM China said in a filing to the Hong Kong Stock Exchange.

The US$3.1-billion MGM Cotai was previously scheduled for a fourth-quarter 2016 launch. But in February 2016, MGM China announced that the opening of the property would be put back to the first quarter of 2017. That was followed by an August announcement that stated MGM Cotai was likely to open in the second quarter this year.

In Tuesday’s filing, MGM China said the final opening date of MGM Cotai would “be subject to obtaining the required government approvals”. U.S.-based MGM Resorts International is 56 percent owner of MGM China.

Investment analysts covering the gaming industry have previously cited delay risk for Macau casino projects due to what they termed backlog regarding official permits.

“The delayed opening is not a surprise as we have previously highlighted that the property opening may be pushed into later during the summer,” said brokerage Sanford C. Bernstein Ltd in a note on Tuesday.

The institution’s analysts added that MGM Cotai’s opening would mark “the largest incremental expansion with respect to footprint, room inventory and gaming capacity (relative to other operators)”.

MGM Cotai will offer approximately 1,500 hotel rooms and suites, a casino with capacity for 500 gaming tables, meeting space, a luxury spa, shops and restaurants.

MGM China’s existing single property, MGM Macau on the city’s peninsula, had 582 rooms, 427 gaming tables and 1,104 slot machines as of June 30, according to the company’s interim report filed in September.

Analysts at JP Morgan Securities (Asia Pacific) Ltd said in a Tuesday note that based on their on-the-ground checks, they believed MGM Cotai “can still open in August or September (ahead of October Golden Week)”. They added that a delay of two to three months is “unlikely to impact the company’s fundamentals”.

The October Golden Week is an annually occurring mainland China festive season that includes China’s National Day holiday on October 1.

“The delay in opening the MGM Cotai property is likely a strategic positive, in that a later opening should meet a stronger market and more competitive landscape,” said analysts at Telsey Advisory Group LLC in a Tuesday note.

MGM China plans to focus on the mass-market segment with the opening of MGM Cotai. The firm’s chief executive, Grant Bowie, told local media in August that the property was likely to launch “only with mass tables”.