Melco Crown Entertainment’s Studio City will launch with 250 gaming tables which were granted by the Macau government for its scheduled October 27 opening, in addition to 1,233 gaming machines, according to Lionel Leong Vai Tac, the Secretary for Economy and Finance.
Studio City will launch with 200 gaming tables with authorization for the remaining 50 gaming tables to be in operation in January 2016. The promotion of more non-gaming attractions will be aided by focusing more on the mass market; that combined with the fact that Studio City has no junket business or VIP rooms is the reason for the allocation, according to the Secretary.
According to the Leong, the gaming industry is performing better during this adjustment period and is witnessing a narrowing of the gap between the mass market and the VIP sector. Gaming operators are encouraged to add more tables to mass gaming floors to help promote non-gaming elements such as food and beverages and entertainment which the Secretary feels are related. The addition of new-to-market gaming tables rather than the relocation of tables from existing properties can create incremental business for operators. The issue of table allocation was realized when an April filing by Melco revealed that if the casino wasn’t operating at least 400 tables by this time next year it might technically fall into default on a US$1.4 billion loan. A press release on Tuesday stated, “Following the table allocation confirmation, Studio City intends to proactively engage the lenders under its senior credit facilities to discuss proposed amendments to the terms of its loan documentation to reflect the number of tables allocated,” according to local sources.
The subject of table allocation has been widespread in Macau this week and the basis of heated discussion between local officials and Wynn Resorts Ltd. The company is scheduled to open its Wynn Palace on March 25, 2016 on the Cotai Strip, and Steve Wynn has expressed frustration with the government’s table allocation policy calling it “almost a mystical process”, “outrageous and ridiculous”, and “the single most counterintuitive and irrational decision that was ever made”.
However, Secretary Leong said that a “similar amount of time” has been spent processing the table applications from both gaming operators and that they both received their grants approximately 40 days after their applications were submitted. Leong added that the city’s “table cap” policy’s which aims to keep the number of live dealer tables at three percent until the end of 2022, is in accordance with the new table grant, and that gaming operators are aware of the time span required for application procedures.
According to Leong, the government acknowledged that Galaxy Entertainment has put substantial resources into allowing local Small and Medium-sized Enterprises (SMEs) into the property, and was granted 100 new tables for their Galaxy Macau Resort.