Melco Crown Entertainment has announced that the Macau government has allocated 250 gaming tables to its new Studio City resort, which is scheduled to open next week.
The company has won permission for 1,233 new gaming machines. At the open, there will be 200 gaming tables and 1,233 gaming machines, with the remaining 50 gaming tables authorized to be in operation beginning in 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 & 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 co-chairman and CEO Lawrence Ho.
The allocation is an improvement on the 150 table given to Galaxy Entertainment’s Phase 2, which opened in May this year, yet is far short of the 400 the company had initially requested for the resort.
CLSA analysts said they expected the property to grow the market, unlike Galaxy Phase 2 which largely cannibalized existing casinos. They forecast MPEL's overall market share to grow from 13.6 percent in 2Q15 to 16.4 percent in 2Q16 before falling back to 15.3 percent in 3Q16 after the opening of Wynn Cotai. CLSA forecasts that GGR splits would be roughly 50/50 for mass/VIP, though acknowledged that there could be some upside given MSC’s non-gaming attractions.
Melco has in the past said a lower allocation could jeopardize the financial viability of the project and mean it is unable to meet conditions under its loan facility.
In August, the company said it has engaged Kirkland & Ellis LLP as its counsel and Moelis & Company LLC as its investment banker to assist it with contingency planning ahead of any table allocation decision for Studio City.
Following the table allocation confirmation Tuesday, Studio City said intends to proactively engage the lenders under its senior credit facilities to discuss proposed amendments to the terms of its loan documentation to reflect the number of tables allocated.
Melco had been confident that the government would reward its efforts to offer a substantial level of non-gaming amenities at the $3.2 billion property. It claims that 95 percent of the attractions on offer are not gambling linked, conforming with the government’s efforts to promote Macau as a mass tourism destination.
The resort will include Asia’s highest Ferris wheel, Golden Reel; the world’s first flight simulation ride based on the Batman intellectual property franchise, Batman Dark Flight digital ride; and the Warner Bros. Fun Zone which is packed with rides and interactive activities themed around popular Warner Bros. and DC Comics characters.
Other attractions include The House of Magic, hosted by acclaimed illusionist Franz Harary; a 5000-seat Studio City Event Center; a working TV studio known as Studio 8; and Macau’s first Pacha Macau mega club, which brings Ibiza-style nightlife to Macau and Greater China.
In terms of retail, The Boulevard at Studio City is a 350,000 sq. ft. immersive retail entertainment environment.
Melco confirms the opening will be on Oct. 27th.
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