Inside Asian Gaming

INSIDE ASIAN GAMING MARCH 2018 18 Intent on standing out from the crowd, MGM actually brought several extinct plant species from the 19th and 20th centuries back to life for Spectacle via botanical garden seed banks in Hong Kong and Europe. COVER STORY having announced in September an official opening date of 29 January 2018, MGM Cotai instead opened its doors on 13 February after enduring one last wait for the Macau Government Tourism Office to grant the necessary hotel licenses. For all the hold-ups, it will still be another three months before the property is fully operational, having opened with only around 500 of the 1,390 rooms and suites it will offer once complete. Among those still to come are the 27 villas, ranging in size from 215 to 570 square feet each, that will form luxury enclave The Mansion – modelled on the renowned VIP accommodation of the same name at MGM Grand in Las Vegas. Likewise, MGM Cotai has delayed the launch of junket operations – five Macau junkets are currently confirmed – until mid-year when it will also have 99 suites (87 to 94 square meters each) and 16 Skylofts (128 square meters each) available. While it waits to initiate VIP, the property’s casino has launched with a combination of mass and premium mass, with the latter being its primary focus. Granted 100 new to market gaming tables by Macau’s Gaming Inspection and Coordination Bureau, with another 25 becoming available on 1 January 2019, MGM has also moved 77 tables across from MGMMacau, taking the total number of tables in its gaming areas upon opening to 177. According to analysts, the mix currently stands at 100 mass market tables, 65 premiummass and 12 VIP direct. What impact will MGM Cotai have on the company’s bottom line? The general consensus is that the property will be a game- changer for MGM China, which has seen its mass market share shrink to around 7% over the past 12 months due to its lack of a Cotai presence. Macau-based analyst Govertsen has tipped MGM to “capture an outsized share with its Cotai property,” adding that, “No other company’s Cotai project will have as meaningful a market share impact as MGM Cotai, given how much leverage the company will have in terms of the increase in number of hotel rooms and the increase in gaming supply. The ramp of MGM Cotai is therefore likely to be as quick, if not quicker, than the peer group.” Not everyone is so sure. Morgan Stanley suggests that ramp- up of MGM Cotai will be “slower than that of peers due to the late opening of casino/VIP tables and a lower number of tables being allocated.” A week before the property opened, Morgan Stanley analysts Praveen Choudhary, Jeremy An and Thomas Allen revealed that they had revised MGM Cotai’s EBITDA expectations for 2018 down from US$250 million to US$219 million, but had revised 2019 EBITDA up from US$507 million to US$525 million. Brokerage Sanford C Bernstein offers a similar take, predicting “full value from the property is still some ways off as ramp up will take 18+ months to achieve. “Our first impression of the property reconfirms our view that ramp up will not be achieved quickly. While the property brings some new elements to Macau and MGM’s food and beverage offering has greatly improved, the casino layout, in our view, is not ideal and suffers from the property’s long, narrow footprint. That Spectacle brings together elements from the natural world via an array of digital art and a massive indoor art garden