3 percent cap remains in place
Studio City, the new resort from Melco Crown in development on Macau’s Cotai Strip, is likely to get 150 new-to-market gaming tables when it opens this fall.
In January, Melco Crown CEO and Co-chairman Lawrence Ho said he had “no idea” how many tables the Macau government would give the property, but “hoped” for as many as 400, according to GGRAsia.
But Deutsche Bank analysts Carlo Santarelli and Danny Valoy said in a note that “checks suggest Studio City may receive roughly 150 tables,” similar to the number of new units granted to rival operator Galaxy Entertainment Group Ltd, when it opened Galaxy Macau Phase II in May.
“While not necessarily a big surprise, we do believe the prevailing view was that 150 would be the minimum for the new ‘free-standing’ openings post the 150-table allocation to Galaxy at its phase two opening,” the analysts wrote. “Thus, if 150 tables proves accurate, for those who believe table capacity is an issue in the market, a group whom we are not amongst, the result could be disappointing.”
The Deutsche Bank team said Studio City may use 110 tables for mass play and 40 for premium mass and direct VIP, or high rollers who are not associated with a junket.
A cluster of new resorts on Cotai were in the planning or construction phases before an historic slump began in mid-2014. By adding more nongaming amenities the operators hoped to get more generous table-game allotments. But the limit at Galaxy suggests the government will be unlikely to go above the 3 percent cap on table game growth in the territory.
As the company prepares for the October 27 opening, Melco Crown Co-chairman Lawrence Ho acknowledged the continuing challenges in Macau, which is in the 14th month of an historic slump due to the Chinese crackdown on corruption. “Macau is going through a transitional phase from a very VIP gaming-centric market to more mass-focused,” said Ho. “It’s probably going to be a rough second half. Hopefully with Studio City opening it would be a new catalyst for the market.”
He also expressed hope that the government “will reward us more, for the hard work we have put in over the last 10 years,” with a sufficient inventory of gaming tables.
