All eyes are on Macau’s Gaming Inspection and Coordination Bureau, the regulators who will decide the number of tables to be allowed at Melco Crown Entertainment Ltd’s Studio City Macau when it opens later this month. In order to avoid technical default on a US$1.4 billion loan, the casino will need to be operating at least 400 tables by this time next year.
Analysts are predicting that the casino resort, with a major focus on non-gaming attractions, will fare better than Galaxy Phase II did when it opened in May with just 150 new tables at its US$2.5 billion facility. Reasons given include a perception that Broadway Macau and Galaxy Phase II were extensions of an existing property and that Studio City offers a new venue with a primary focus on family oriented entertainment.
Also noted were recent announcements that the government would be introducing unspecified policies to support the Macau economy.
Even if only allocated 200 to 250 new tables the casino would still have a year in which to move existing tables from other concessions it owns. In early August Studio City International Holdings announced they had engaged Moelis and Co LLC as its investment banker and Kirkland and Ellis LLP as its counsel to assist it with contingency planning ahead of any table allocation decision.
Studio City is a Hollywood-themed integrated resort being built at a cost of more than US$3 billion. Included in the offering is the world’s first figure 8 Ferris Wheel, set between the 1,600 room hotel towers; a flight simulation ride that follows a digitally animated batman story line; 40,000 sq ft Warner Bros. Fun Zone play center; a 5,000 seat event center for world-class entertainment; multi-theater House of Magic; a working TV studio with audience participation in live broadcasts; Pacha Macau nightclub; 350,000 sq. ft. ‘immersive’ retail entertainment environment; and more than 30 world-class restaurants and eateries including a 3D space station dining experience utilizing holographic technology and gigantic windows looking out into deep space.
If the government is able to relax their self-imposed cap of 3 percent compound annual growth in table allocations to reward a developer who has gone “all out” to offer tourists more than a gambling experience in Macau – now may be the time to show their commitment to the region’s success.