Studio City to cease VIP rolling chip operations as owner Melco looks to diversify offering beyond gambling
Gaming and hospitality company Melco Resorts & Entertainment is set to cease VIP rolling chip operations at its Studio City casino resort from January 15, 2020. The company announced its plans in a Tuesday filing with the Hong Kong Stock Exchange.
Studio City opened to the public in 2015. The property is located in Cotai, often referred to as the Macau equivalent of the legendary Las Vegas Strip.
Studio City did not feature VIP gaming tables at first. Melco CEO Lawrence Ho said at the time that the lack of those particular gambling options was a “business decision” that was related to the Macau government’s cap on the number of gaming tables that could be allocated to a new property. Melco had originally asked for a permission to add 400 gaming tables at its Studio City resort but was only allowed 250 tables by city officials.
The glitzy Cotai property operated without VIP gaming tables for a little over a year. In August 2016, Melco announced plans to add VIP tables at the resort and VIP operations eventually commenced at Studio City in November of that year.
The casino and hospitality giant did not provide further detail on why it has decided to cease VIP rolling chip operations and how exactly this would affect its high roller operations at Studio City in its Tuesday filing.
Diversification
According to multiple brokerage firms, gross gaming revenue’s performance in Macau could slow down a bit during the first half of the year and its VIP gaming market will probably be affected at a higher rate than the mass market.
The Macau government has been promoting initiatives and has been encouraging the six casino concessionaires to diversify their offering and thus reduce the city’s reliance on gambling to avoid repetition of the recent unprecedented crisis the local casino market experienced. In 2013, Chinese President Xi Jinping launched a multi-pronged crackdown on corruption as a result from which high rollers from Mainland China withdrew from Macau, causing double-digit drops in gross gaming revenue in the gambling mecca.
Melco has been among the companies to adapt the quickest to the new landscape and to incorporate multiple non-gambling options into its Macau properties. eSports has been one of the areas the operator has been looking to diversify its offering into.
Last summer, Melco launched Macau Estadium, its first eSports arena, at Studio City. The 274-seat facility was also the first one of its kind to open doors in Macau. It is now host to major eSports tournaments and virtual gaming leagues and livestreams events that take place in different other parts of the world.
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