For those who may not know it, MGM Resorts International, a US-based casino concern, has a Chinese arm. This Chinese arm of the company sought and has now been given approval to set up a Macau resort and casino. The move is expected to help move MGM gain some ground on its rivals who are already invested in the Macau gambling market which is now considered the most lucrative in the world.
The Macau government publishes a gazette and it was in this publication that the news that MGM had received approval to go ahead with its $2.5 billion resort was announced. The resort and casino complex is expected to be built in the Macau district of Cotai. This important announcement indicates that the MGM is clearing the way quickly as it moves to install its second casino in the area as it seeks to compete with its many competitors who already have a larger presence within this important Asian-area gambling hub.
In November of 2012, MGM announced that it received a land concession intended for this new project. The new facility will have a 1,600-room hotel that includes some 500 gambling tables along with an estimated 2,500 slot machines.
Macau is a semi-autonomous area of China. Over time, it has managed to become one of the most important sources of huge profits for several Las Vegas operators which include Wynn Resorts and the Las Vegas Sands Corp. Macau has some 36 casinos now and those casinos are turning over profits that are estimated to be nearly six times more than the profits that are seen from casinos located in Las Vegas. Most of the players that come to Macau are from mainland China, and they seem more than able to put money on the table.
It was estimated that Macau revenues in these casinos rose by 14 percent, hitting $38 billion in 2012. While this is impressive, it was down from 2011 numbers which were 42 percent. This level of increase is why so many casino operators are looking to expand into this particular market.
When compared to the Sands (4 casinos in Macau) the MGM has a much smaller local presence. The announcement that MGM had received approval is considered an important step in the company gaining some ground on its competitors and came much faster than expected. The new resort and casino is expected to open sometime around mid-2016. The fact that approval came so fast has investors and potential investors smiling.
But not everyone is smiling. It has also been reported lately that five other Macau casino operators plan to open their own new projects or will expand their existing casinos and resorts to stay one step ahead of what they see as their competition. The majority of casinos and resorts that are in Macau are locted on what is known as Cotai Strip. This is a strip of reclaimed swampland and was designed to look very much like the Vegas Strip. For now, there seems to be no end in sight for this tiny piece of land and those who want a share of it.