Parisian Macau Awarded 150 Gaming Tables Despite Growth Regulators
Posted on: September 5, 2016, 06:00h.
Last updated on: September 5, 2016, 03:23h.
Sands China’s new $3 billion casino resort, The Parisian Macau, located on the Cotai Strip will open on September 13th with just 100 gaming tables.
The allocation by the Macau regulator represents fewer tables than Las Vegas Sands Corp Chairman Sheldon Adelson had hoped for, but considerably more than some analysts thought the casino might be awarded, which was zero.
New table allocations have become a source of intense curiosity and speculation in the Macau gambling sector. Operators of new multi-billion-dollar casinos, conceived before Beijing’s crackdown on corruption sent revenues into tailspin, must now beg for scraps from the regulator in order to gain enough tables to allow them to be profitable.
Table games are still the main source of revenue in Macau’s casinos, but the Chinese government is eager to put a lid on gambling expansion and has imposed their quota system heavily.
China wants operators to focus on non-gaming attractions and amenities, but operators argue that the tables provide the revenue that sustain such attractions.
Adelson had hoped to get 250 tables. Instead, he will begin with 100, receiving 25 more in 2017 and a further 25 in 2018. It is a sufficient number to sustain the Parisian, especially because some tables can be transferred to the property from the Sands Macau, according to Sanford C. Bernstein & Co analyst Vitaly Umansky.
In fact, it’s exactly the same deal Wynn Resorts received for its $4 billion Wynn Palace, which flung open its doors on August 22, despite having been built to house 500. The Wynn Palace eventually opened with around 350 tables, having transferred 250 from the Wynn Macau.
Both the Galaxy Entertainment Group and Melco Crown Entertainment each received 250 for their new projects last year. But the Macau regulator, under pressure from Beijing, wants to limit growth to no more than 3 percent per year until 2023. Meanwhile, it aims to increase revenue from non-gaming attractions from 6.6 percent in 2014 to over 9 percent.
Macau Breaks Its Fall
After 26 consecutive months of dwindling revenues, the gambling hub finally broke its fall in August, posting a 1.1 percent increase. Adelson recently said he believed Macau had finally bottomed out and was beginning to show signs of stabilization, evidenced by a noticeable resurgence in mass market gaming at Sands properties over the summer.
Despite this, analysts are warning that Macau’s newest properties may struggle in the market, at least initially. “We believe it is much more difficult to ramp up a new property in a low growth environment, based on Studio City’s and Galaxy Macau Phase 2’s performances,” said Praveen Choudhary, analyst at Morgan Stanley in Hong Kong.
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