Sands China comes up short on tables at The Parisian as Macau seeks to diversify away from gaming
Sands China’s upcoming The Parisian resort was allocated 150 gaming tables by the Macau government, fewer than the 250 Las Vegas mogul Sheldon Adelson had hoped for, as the world’s biggest gambling enclave distances itself further from gaming.
Among the 150 gaming tables granted to the Cotai Strip-based project, expected to open to visitors on September 13, 100 will be available upon its debut, according to a company statement to the Hong Kong Stock Exchange.
The number of newly authorised tables came in significantly below expectations laid out by billionaire Adelson last year, as well as the 250 each approved for the new properties developed by rivals Galaxy Entertainment Group and Melco Crown Entertainment in 2015.
Coming on the heels of the long-awaited return to growth for Macau’s gaming revenues in August, it pointed to a stepped-up effort by the government of the former Portuguese colony to curb the city’s dependence on gambling and boost tourism and shopping.
While acknowledging the impact may be limited, analysts said fewer new tables may make gaming less favourable to mass market gamblers – the segment that both authorities and local casinos are shifting their big bets to.
“The allocation of 150 tables is more than sufficient to populate the Parisian casino as Sands China is able to transfer tables from its other properties to the new one,”said Aaron Fischer, regional head of consumer and gaming research with CLSA.
Last month, American tycoon Steve Wynn’s Wynn Macau also received an allocation of 150 tables for its Wynn Palace luxury resort, fuelling concerns over the long term uncertainties in returns to its massive US$4 billion investment.
CLSA’s Fischer reckoned that with fewer gambling tables allocated to the new resorts, there would be fewer tables with low minimum bets, making gaming less appealing to mass market gamblers.
Lionel Leong, Macau’s Secretary of Economy and Finance, reiterated in April that the government would keep a strict 3 per cent cap on the annual growth of new gaming tables until 2023.
The city has been transitioning into a destination for holidaymakers rather than high rollers, with more family-friendly entertainment facilities and shopping malls, and fewer VIP gambling rooms.
Experts projected a stiffer fight for gaming table allocations among Macau casino operators with the possible tightening of the table allocation policy.
“It is reasonable to expect that upcoming resorts like MGM Cotai and Lisboa Palace will also receive around 150 tables but this will depend on the investments made in non-gaming,” Fischer said.
Morningstar equity analyst Chelsey Tam suggested MGM China would be the hardest hit if it received fewer than 250 tables for its MGM Cotai resort. “It has only 427 tables at MGM Macau, the lowest among the six operators, meaning that it will have fewer underused tables that can be transferred to MGM Cotai.”
Sands China shares rose 2.33 per cent to HK$33 at Monday’s close of trading.