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Galaxy allocation in line with expectations: UBS

The Macau government has granted 150 new tables to Galaxy Macau phase 2, a number in line with what the industry expected after 200 plus tables seemed unlikely, said UBS.

UBS analysts in a note said they maintain that the number of gaming tables has not been an operational constraint for growth for the industry as a whole.

“This was true even during the peak periods of the industry in Q413-Q114, when volumes were 70% higher than current levels.”

Analysts Anthony Wong and Angus Chang believe only 2 to 3 new junket rooms will open and more than 120 of net new tables will be allocated to the mass segment.

“We notice that at the recent reconfiguration of the original property (GM ph1), company has taken 60+ mass tables offline since April, in preparation for re-allocation to GM ph2, and to free up space for installation of various gaming machines.”

They add that an initial configuration could be about 270 mass tables in phase 1; and about 180 mass tables in phase 2 floor.

“Combined, the properties will have 700 tables (with some at Broadway Macau), of which ~450 in mass and ~250 in VIP.”

“We also note that the recent reconfiguration at ph1 (~15-20% fewer mass tables since Apr) have had no discernible impact on the property's mass share. Current rules imply 1500 tables left for remaining projects.”

The analysts say the government's rule of an industry table cap - no more than 3 percent CAGR for 10 years, starting from a base of 5500 in early 2013 - has not changed in the last few years. 

GEG held  three rallies in the Broadway Theater recently with around 6,000 members to celebrate the grand opening of GM ph2 and Broadway Macau which both open on Wednesday.

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