Macau may be removed from tax haven watch list
When MGM Resorts International’s new Cotai Strip resort in Macau finally opens January 29, it could be with 150 new-to-market gaming tables. That’s the word from analysts, on the basis of the number of tables granted to Wynn Palace and Parisian Macao, both of which opened in 2016.
As Morgan Stanley’s Praveen Choudhary observed, Wynn and Parisian each got 100 tables to start, with two additional allotments of 25 tables each. “So one should expect MGM to get the same; 125 is a good outcome on the first day. We have 125 for 2018 in our model.”
Research analyst Grant Govertsen of Union Gaming Asia Securities agreed, telling Inside Asian Gaming, “I think the baseline expectation is for 150 tables, identical to Wynn Palace and Parisian. Anything greater than 150 would represent a pleasant surprise.”
Even if the number comes up short, Deutsche Bank analysts said the new resort can easily compensate “given the ability to shift capacity from the peninsula.”
Growth in the gaming sector has been strongest along the Cotai Strip, where Sands China, Wynn Macau, Galaxy Entertainment Group and Melco Resorts & Entertainment all have a presence. Last month, the Las Vegas Review-Journal reported that MGM and SJM Holdings each sacrificed market share due to delays in completing their Cotai projects. MGM Cotai will open just before the Chinese New Year, while SJM’s Grand Lisboa Palace may not open until almost 2019.
Meanwhile, in welcome news for the world’s top gaming destination, Macau will soon be removed from the European Union’s tax haven “blacklist.” According to the Macau Business Daily, the EU will delist seven other jurisdictions, including Panama, South Korea, the United Arab Emirates, Barbados, Grenada, Mongolia and Tunisia.
In a further show of its commitment to fight corruption, China’s 19th Central Commission for Discipline Inspection may call for stronger anti-graft measures. But the growing use of cryptocurrencies could be a monkey wrench in China’s efforts to curb capital outflow. Risk consultant Steve Vickers told GGRAsia the digitally encrypted currencies could also pose a problem for the gaming industry.
“Potentially from an organized crime point of view, cryptocurrencies do afford opportunities for the avoidance of government duty,” said Vickers. “For example, China’s program to contain capital outflow could be circumvented quite easily if cryptocurrencies took on a wider distribution.”
He added that Macau casinos that are “heavily or very heavily focused on the VIP trade are more vulnerable than those that are more diversified in their business approach.”
