If the prediction released by analysts this week that Melco-Crown’s Studio City will receive 150 new to market gaming tables when it opens in October – the same number allocated to Galaxy Phase II a few months earlier – proves accurate, it’s reasonable to assume the bar has been set.
With the Parisian, Wynn Palace, MGM Cotai and Lisboa Palace to come between now and 2017, that means another 600 tables on top of the 300 for Studio City and Galaxy II combined, plus 60 or so for Louis XIII.
Studio City is the latest new property nearing completion in Cotai
But when it comes to the mystery of Macau’s table cap, a final figure of around 960 new gaming tables raises more questions than it answers. Here’s why.
The Macau government has made it very clear it has no intention of wavering from its policy of limiting any increase in the number of gaming tables in Macau to three percent annual compound growth between January 2013 and December 2022.
Starting from the official base of 5,485 tables in operation at the end of 2012, three percent annual compound growth would allow for a total of 6,360 by the end of 2017 – 311 tables shy of the 6,671 that will actually exist if 960 new tables are allocated as forecast.
In other words, if the government decided to strictly set its 2017 limit at 6,360 tables, at least a few of Cotai’s coming properties would be in for a rude shock when their new tables were allocated. WGM has in fact heard rumors that some of the concessionaires could be allocated no new tables – a prospect that seems unlikely but far from impossible. If it did happen, their only option would be to relocate tables from their older properties with Sands China having already mooted the possibility of converting Sands Macao to a non-gaming facility should they require tables at the Parisian.
However, the cap system also allows the government to count ahead if need be and allocate every allowable new table through 2022 immediately. That means another 1,014 tables that could hit the market between the end of 2017 and end of 2022 – 703 more than the 960 likely to be allocated across the eight Cotai 2.0 properties first time around.
To put it simply, should the government give 150 new tables to each of the six concessionaires and another 60 to Louis XIII between now and 2017, it will still have 703 tables up its sleeve to allocate as it sees fit.
Not a bad bargaining chip. It could well be that the lure of these 703 tables is being used to ensure the new properties take heed of the government’s request for greater diversification, or perhaps their allocation will ultimately come down to entirely new criteria. Either way, it opens up a world of possibilities.
