MGM Gets Go Ahead to Build Casino in Macau

MGM ChinaMGM China, which is a subsidiary of MGM based in Las Vegas, was recently granted approval to build a casino in Macau. This will be the group’s second casino resort in Macau and it will be built on the Cotai strip. MGM China opened its first casino there, the MGM Macau casino resort in 2007. The new casino resort will be MGM’s first casino construction in four years since it developed the City Center casino resort in Las Vegas.Macau which is a Chinese Special Administrative Region has become the largest gambling area in the world surpassing the income from gambling in Las Vegas. In recent years the growth in gambling has been phenomenal but the Chinese government has been putting pressure on the Macau authorities to diversify the economy which is very reliant on income from gaming. One way in which this has been done is to restrict the number of visas to Macau granted to Mainland Chinese gamblers. (See article: Macau Casino Growth Dependent on Chinese Visas?) At the same time there is great competition among the six casino resort operators in Macau to increase their share of the Macau gambling market. As well as MGM, Wynn Resorts and the Las Vegas Sands Corporation also operate casino resorts in Macau.MGM has an almost 18 acre site on Macau’s Cotai strip on which to build it’s second casino there but must now wait for final government approval before construction can begin. It is expected that the construction of the proposed 2.5 billion dollar casino resort will take up to three years. Since the Macau government wishes to diversify its economic base, the new casino resort will have eighty five per cent of its area given over to non-gambling activities. There will be over 1 500 hotel rooms, retail outlets, entertainment complexes, restaurants and the casino will have 2 500 slot machines and 500 gaming tables.

Since the recent slow down in the Chinese economy has had an effect on the number of mainland Chinese gamblers travelling to Macau, there has been a resultant slow down in income growth in Macau’s casinos. However revenue from gambling is continuing to rise almost month on month but not at the spectacular levels experienced in 2011. Macau now gains as much as five times the income from gambling as that generated in Las Vegas. So a second casino for MGM will only add to this revenue.

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