Macau (MNA) – Union Gaming sees a conflict looming in the table allocation process of MGM Cotai – recently awarded a total of 125 mass gaming tables – owing to the company’s licence extension process, the investment bank said in a note late Wednesday.
Initially, the Macau SAR government plan announced yesterday is to grant 100 tables for the opening of MGM Cotai next Monday, with 25 more after nearly a year, on January 1, 2019.
However, as Union Gaming stated, the MGM concession expires in early 2020, thus presenting a conflict for the government in terms of allocating ‘a final batch of 25 tables right on top of the license expiration.’
The brokerage stated that once the licence conundrum is solved, it expects there will be an extra assignment of 25 tables in line with the The Parisian Macao and Wynn Palace move. Union Gaming also expects to see a similar development with Grand Lisboa Palace.
‘We believe that the final number allocated will, in all likelihood, be at least 150 tables,’ the note says.
Union Gaming believes that the total number of tables will be enough to cope with the company revenue and cash flow expectations, even though it stated the government announcement to grant MGM Cotai 125 gaming tables yesterday is ‘below consensus of 150.’
According to Union Gaming calculations, 657 tables are still currently available for allocation. If the forecast allocation were accomplished with the new openings, there would still be 482 to be granted under the current cap.
The report also sees probable table allocations to Melco’s Morpheus, Galaxy Phases III and IV, and Sands’ Londoner project.
[Edited by Sheyla Zandonai]