A number of casino stocks, including Wynn Resorts, Las Vegas Sands and MGM Resorts, rose on Monday amid positive news from the much-maligned Macau gambling scene.
Macau, the world’s biggest casino hub, posted a drop of 9.5 percent in gambling revenue for April, to about $2.17 billion, marking the 23rd consecutive monthly decline for the former Portuguese colony. That said, the decline was less than feared.
Shares of Wynn popped nearly 6.8 percent Monday, while Las Vegas Sands and MGM resorts gained about 3.5 percent and 1.7 percent, respectively.
That said, Wynn and Las Vegas Sands are still down 16.35 percent and 11.56 percent in the past year, respectively, while MGM has only risen 1.26 percent.
Studio City International Holdings Ltd announced today that the Macau government has authorized Studio City’s gaming operator, Melco Crown (Macau) Ltd, to operate 250 new gaming tables and 1,233 new gaming machines.
Furthermore, 200 of the 250 gaming tables and all of the gaming machines may be in operation by the time of Studio City’s opening. The remaining tables will be permitted to become operational starting from January 2016.
“We thank the Macau Government for its consideration of our application and approval of gaming tables and machines for Studio City. We are confident that Studio City’s offering of cinematically-themed entertainment, retail, food and beverage and accommodation options will contribute meaningfully to the economic and employment diversification of Macau. We are excited to welcome Studio City’s first patrons later this month,” said Lawrence Ho, the Co-Chairman and Chief Executive Officer of Melco Crown Entertainment.
Earlier this year, Melco Crown Entertainment said that it might fall into default on a HKD10.86 billion loan if it was unable to open “with a minimum [of] 400 gaming tables available for operation.”
Studio City now plans to engage lenders under its senior credit facilities to discuss proposed amendments to the terms of the casino’s loan documentation. This is the direct result of the shortfall in the number of tables that have been allocated.
The announcement comes only days after Wynn Macao and the local authorities engaged in a series of verbal attacks regarding the delays in the allocation and limits of gaming tables. Steve Wynn, Chairman and Chief Executive Officer of Wynn Resorts, criticized the government delays last Friday, saying that the uncertainty around the number of tables to be allocated was complicating decisions concerning the hiring and training of workers, and could force Macau operators to terminate employees.
The government responded by expressing its dissatisfaction over the remarks, reaffirming the merits of the table cap policy, and summoning Wynn representatives to a meeting with the Secretary for Economy and Finance, Lionel Leong, on Sunday.
The allocation of tables and annual cap are part of a larger effort to diversify Macau’s economy and ease its reliance on the gaming industry, following the orders of Xi Jinping in December 2014. The table cap policy limits the growth of live dealer tables to 3-percent compound annual expansion until the end of 2022. Staff reporter
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