MGM Resorts International’s MGM Grand Paradise subsidiary has been awarded a new concession contract in Macau, an operation agreement that will cover a 10-year term in the major gambling hub. The concession holder of MGM China, which is 56% owned by MGM Resorts, will invest approximately $2 billion over the next decade, with 50% expected to be treated as capital expenditures and the remaining amount as operating expenses.
Around 90% of this spending will be earmarked for the development of international tourist markets and non-gaming projects to help drive diversification in the territory. MGM China will also receive an additional 200 table games, raising its total table count to 750, a move the company believes will support future market share growth opportunities.
Bill Hornbuckle, Chief Executive Officer and President of MGM Resorts International, said: “On behalf of MGM Resorts International, I would like to express my heartfelt gratitude to the Macao SAR government for giving us support and opportunity on the new gaming concession. We always believe in the strong potential of Macau.”
“As Macau is entering a new milestone, we will continue to share our international network, experience, and resources with the Macau team. Under the leadership of Managing Director Pansy Ho, together with our remarkable management team, I am confident that MGM China will demonstrate further strength in the integrated tourism and leisure industry and continue to make contributions to Macau,” he added.
MGM also highlighted that the allocation between capital expenditures and operating expenses is based upon preliminary estimates, meaning it may change materially. Capital projects and expenses on which the allocation estimate was based are subject to review and approval.
Melco Resorts & Entertainment also announced details of its ten-year concession earlier this week. Under the new concession, the company is authorized to operate the Altira Casino, City of Dreams, and Studio City as well as the Grand Dragon and the Mocha Clubs.
Melco was issued 750 gaming tables and 2,100 electronic gaming machines. Melco’s previous table allocation under the table cap was 946 tables, meaning that, in contrast to MGM, its number of tables will reduce by 196, or 21%, under the new concession rules. However, Melco has undertaken to carry out an investment in the overall amount of $1.4 billion, less than MGM’s commitment.
The new six licenses – which also include Sands China, Wynn Macau, Galaxy Entertainment, and SJM Holdings – were signed earlier this month, and run from January 1 until the end of 2033. The long-anticipated signing concludes a year-long jostling for the rights to operate gambling halls in the only place on Chinese land where casinos are legal.
Original article: https://www.yogonet.com/international/news/2022/12/21/65482-macau-mgm-unveils-concession-details-announces-2b-investment-plan-over-the-next-ten-years
