MGM China Holdings Ltd, a majority-owned subsidiary of MGM Resorts International and the Macau-based casino operator, is actively pursuing expansion plans for its flagship property, MGM Cotai. The company has begun consultations with consultants and designers regarding the addition of hotel rooms and wellness services at the resort.

Consultations underway:

Unnamed sources familiar with the matter revealed to Bloomberg that consultations are underway, although they declined to speak on record. This initiative follows MGM China’s strategic move to capitalize on its new 10-year gaming concession in Macau, which was confirmed in December 2022.

During a press briefing in December 2022, MGM China’s chairperson, Pansy Ho Chiu King, outlined several non-gaming investment commitments tied to the new concession. A significant portion of these commitments is earmarked for MGM Cotai, a sprawling property that surpasses its predecessor, MGM Macau, in size and scope.

One of the key pledges includes the development of an “Urban Oasis,” described as a new landmark for health and wellness tourism. The project aims to integrate comprehensive wellness and medical services such as medical hydrotherapy, diet therapy, leisure and health management, medical tourism, and health assessment under one roof.

In addition to wellness initiatives, MGM China plans to expand the accommodation options at MGM Cotai. The resort, which originally opened its doors in February 2018 with 1,390 rooms, will see the addition of an extra hotel tower to meet growing demand.

Government requirements and market position:

Under the terms of the new concessions effective from January 2023, Macau’s government has mandated that casino operators increase their offerings of non-gaming amenities. This directive aligns with the city’s broader strategy to diversify its economy away from reliance on high-stakes casino gambling.

Despite this shift, MGM China has seen its market share in Macau’s gross gaming revenue rise steadily. As of the first quarter of the year, the company reported a market share of 17 percent, up from 15.2 percent the previous year and 9.5 percent in 2019. This growth has been supported by an increase in allocated gaming tables under the new concession terms.

Separately, MGM China announced the pricing and expected net proceeds from its recent issuance of US$500 million in senior unsecured notes. According to a filing on Wednesday, the notes carry a coupon rate of 7.125 percent and mature on June 26, 2031. The company expects net proceeds of approximately US$493.1 million after deducting initial purchaser discounts and other offering expenses.

As GGRAsia reports, MGM China intends to utilize the net proceeds to repay a portion of its outstanding amounts under the revolving credit facility. The company also noted its ability to reborrow these amounts under the same facility as needed.

The ongoing developments at MGM Cotai underscore MGM China’s commitment to expanding its footprint in Macau’s competitive market. With a focus on enhancing both hospitality and wellness offerings, the company aims to cater to evolving consumer preferences and regulatory requirements, positioning itself strategically for long-term growth in the region’s tourism and entertainment sector.