MGM’s Cotai Casino Could Benefit from Its Delayed Opening

The gambling crackdown initiated by Chinese President Xi Jinping revealed to the Macau government the special administrative region’s high reliance on its casino industry. And it also showed the casino industry’s great reliance on revenue from VIP players from Mainland China.

Quickly after the above-mentioned crackdown was launched, Macau saw a quick and continued double-digit drop in its gross gambling revenue, a shocking trend that was maintained for over two years and that the city managed to emerge from only last summer.

Urged by the government, Macau-licensed casino operators began restructuring their business models and refocusing a greater portion of their attention to luring more mass market customers and reducing dependence of their casino resorts’ profitability on casino services.

MGM Resorts International, one of the operators licensed to run casinos in the former Portuguese colony, is currently building its second property in the city and first on Cotai, a strip of land often referred to as the Asian equivalent of the Las Vegas Strip. The company has repeatedly pointed that its plan for the $3.1-billion property was to build an exquisite destination for mass market casino players and for international non-gambling visitors.

MGM Cotai was originally scheduled to open doors in late 2016. However, developers pushed opening for the first quarter of 2017. Unable to deliver on that deadline, too, MGM later on announced that the property would be launched in the second quarter of the year. Under the latest information released by the operator, the integrated resort is set have its ribbon cut in the final quarter of 2017.

What has delayed the project? MGM attributed the several delays to the complexity of their plan. Inspired by the rich Chinese culture and traditions, MGM Cotai’s exterior is planned to be styled as a jewelry box. London- and New York-based architecture firm Kohn Pedersen Fox had been appointed to the multi-billion-dollar project.

MGM has also explained previously that it wanted to make sure that it would operate a property that reflected the current demands and needs of the market. Based on the Macau market’s performance after last summer’s launch of more mass market and family-oriented properties (Wynn Palace and The Parisian Macao), MGM will, too, pursue the same business model when it launches its MGM Cotai.

Compared to many of its Macau counterparts, the MGM resort will feature twice and even three times more hotel rooms and suites for guests (over 1,400 such rooms). Facilities at the resort will also include meeting and convention space, spa, retail space, and multiple food and beverage opportunities.

MGM Cotai has also been heavily promoted as the future home of Asia’s first dynamic theater. The innovative facility will feature 14 different seating configurations and a 180° immersive stage backdrop that will reproduce 4K content.

The information we have been given access to shows that the resort is intended to be a true piece of art. And although many may be intimidated by the multiple delays, the belated opening of the resort could actually benefit MGM. Macau’s casino market has just entered a recovery phase and is expected to further improve in the months to come. Thus, MGM Cotai will be entering a stable or at least a relatively stable market with greater growth and competition opportunities.

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