Macau casino operator SJM Holdings Ltd expects to get up to 200 new-to-market live gaming tables for the opening of its HKD39-billion (US$5-billion) Grand Lisboa Palace gaming resort (pictured) on Cotai, a property the firm wants to open before the end of the first half.
That is according to a Tuesday note from brokerage Sanford C. Bernstein Ltd, citing commentary from the casino group’s management following its first-quarter earnings filed that day with the Hong Kong Stock Exchange.
“SJM has not yet had a table allocation” from the city’s government for Grand Lisboa Palace, stated Sanford Bernstein. It added the casino group expected a new-table allocation from the Macau government “similar to other recent Cotai property openings (150 to 200 tables)”.
Analysts Vitaly Umansky, Louis Li, and Kelsey Zhu said in their memo that SJM Holdings plans to open with 304 gaming tables – which the brokerage estimated would be about 8 percent of Cotai-property table inventory – with 1,034 slot games, also about 8 percent of Cotai-market inventory in that category.
The commentary implied that the balance of the tables would be taken from SJM Holdings’ existing table inventory in its other venues.
Macau has a table cap scheme in its casino market, that has been in place since 2013. It was designed by the local authorities in order to limit to 3 percent the compound annual growth in the number of new live gaming tables in the overall market, up to December 2022.
Sanford Bernstein said in its latest memo SJM Holdings aimed to open Grand Lisboa Palace “by end of June”. In a Tuesday filing, the casino operator stated it “anticipates” opening its resort scheme on Cotai “during the first half of 2021”.
The brokerage added: “The property will open in a limited capacity. Management expects to open with only 300 hotel rooms initially – all at the Grand Lisboa Palace Hotel – and limited retail.”
That was a reference first to the casino firm’s self-branded hotel at the property. Eventually it will also have a “Palazzo Versace” branded hotel, and a “Karl Lagerfeld” branded hotel.
Once fully open, the entire Grand Lisboa Palace property would have 1,892 rooms, which Sanford Bernstein suggested was also about 8 percent of Cotai-market share.
The institution said it did not share SJM Holdings’ optimism that the new property – the firm’s first attempt at a large-scale multipurpose casino resort – “can achieve better than fair share on its gaming capacity”.
The analysts wrote: “We are very sceptical that this can be achieved at Grand Lisboa Palace.”
Sanford Bernstein further noted: “Competition on Cotai is very strong and product offering is very competitive (and in… cases will be superior).”
The brokerage added: “Marketing prowess, loyalty programmes and service levels are also likely to remain strong (and better) at many other properties. We do not expect Grand Lisboa Palace to even get fair share on Cotai (at least in the first few years).”
