The chief executive of MGM China Holdings Ltd, Grant Bowie, said that delaying the opening of casino resort MGM Cotai (pictured) is “a good decision” for both the Macau gaming market and the firm.
Macau casino operator MGM China on Thursday said the opening of its under construction new resort on Cotai would be moved to the first quarter of 2017. MGM Cotai was scheduled for a fourth quarter 2016 launch.
“This decision is a good decision for Macau and it is a very good decision for MGM [China], because we all understand that market confidence is very important and that we need to be successful,” Mr Bowie told reporters on Saturday, as quoted by public broadcaster TDM.
He added: “This is a positive decision for the success of Macau and for the success of MGM.”
Macau’s casino industry has been posting monthly year-on-year gaming revenue declines since June 2014. That has had a negative impact on investor sentiment, leading to a sharp decrease in share prices of gaming operators with exposure to Macau, say investment analysts.
Mr Bowie stated that MGM China and parent company MGM Resorts International decided to delay the opening of MGM Cotai better to understand the ongoing changes in Macau’s gaming market.
“The transition from the VIP market to the mass market is occurring,” Mr Bowie said on Saturday. “That transition is probably taking longer and for the growth to come back to Macau is taking longer than we expected. And I think that, therefore, it makes sense that we take a little bit longer to make sure that we have the right product, particularly with this transition towards the mass market.”
Despite the opening date delay, the construction budget for MGM Cotai remains at HKD24-billion (US$3.1 billion), excluding land costs and capitalised interest.
Macau market rival Wynn Macau Ltd in November announced it was delaying the opening of its US$4.1 billion Wynn Palace resort on Cotai by three months. Earlier this month, Wynn Macau chairman Steve Wynn admitted a further delay was “possible”.
Sterne Agee CRT analyst David Bain said in a note on Friday that the MGM Cotai opening delay was already in the cards prior to MGM China’s announcement. “We view this as unsurprising to investors … but it does impact calendar year 2017 sell-side consensus that would have otherwise gone higher,” Mr Bain stated.
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”We do not believe that reopening the advance notice nomination deadline [for board directors] is appropriate or justified”
Daniel Boone Wayson
Chairman of the Wynn Resorts board of directors