Inside Asian Gaming

IAG OCT 2020年10月 亞博匯 72 COLUMNISTS Vegas, where the business rivalry has greater intensity. So was it a smart move to pass on Japan? In my view, that would depend on the alternative set of investment opportunities that offer the potential for a good outcome. Certainly, some interesting prospects in Macau remain with a couple of land parcels on the Cotai Strip still to be developed. Yet, despite the existing competition, would a new casino-resort development on these sites be conceivably lucrative? And would IR investors be better off focusing on either Japan’s untested environment, other Asia regional markets or doubling-down on Macau’s core market? Historical results of some of the more recent IR projects could provide some guidance. In fact, at least one Macau enterprise has underperformed expectations. Since its opening in February of 2018, and despite a greater number of rooms and much larger capital cost, the US$3.2 billion MGM Cotai has not achieved a quarterly EBITDA result in excess of its smaller, cheaper sister property on the peninsula. This kind of performance begs the question of how investors should evaluate competing proposals from disparate jurisdictions with differing regulatory requirements. What framework should they use and what level of return should they expect when evaluating an IR investment proposal? Is Macau better than Japan or even the rest of Asia? It’s clear that anyone expecting the Macau-style oligopoly returns of the past would not look favorably on the current environment. Rather, my argument is that while MGM Cotai may not have garnered the lion’s share of Cotai profits, their recent results are probably the new-normal for fresh IR projects. Expect ROIs to hover in the low single-digits and hope to at least Could the more subdued returns generated by Macau’s MGM Cotai represent the new norm for Asian IRs? 澳門美獅美高梅的較低回報率是否將成為亞洲綜合度假村的新常態？