Wynn Resorts shifting table games to new Macau resort
When Wynn Resorts Ltd. opens the doors of the Wynn Palace Resort on Macau’s Cotai Strip next week, the company will shift some of its 250 table games at Wynn Macau to the new property.
The plan to shuffle tables between properties was brought about by the announcement by Macau’s government last week that Wynn Palace would only be permitted to offer 150 table games, including 100 immediately when the doors open Aug. 22, and 25 each at the beginning of 2017 and 2018.
“Macau’s casino concessionaires and subconcessionaires have always had the ability to shuffle tables around between properties in order to better cope with demand trends,” said Grant Govertson, a Macau-based analyst with Union Gaming of Las Vegas.
“Without exception, you will see the peninsula-only operators shift a large number of tables to Cotai when their respective projects open,” Govertson said. “That Wynn is able to shift 250 tables to Cotai is really telling in terms of how much demand has slackened over the past couple years.”
Govertson issued a report to investors Sunday theorizing that Macau’s regulators opted to reward companies that had a greater focus on family entertainment and nongaming offerings at their developments.
“In these cases, we believe the government’s view that Galaxy and Melco Crown showed appropriate support for small and medium-sized enterprises via many local Macau restaurants invited to open at Broadway and Studio City (properties).”
On Monday, Wynn announced in a Securities and Exchange Commission filing that it would shift tables from Wynn Macau, located on Macau’s peninsula, to the Cotai Strip property, the Chinese enclave’s busiest center of commerce.
“The concept of moving underutilized and unutilized tables from the peninsula property to Cotai makes perfect sense,” Govertson said. “We think that the tables given to Wynn by the government, while lower than expectations, will be enough to achieve our estimates over the next two years. However, beyond that, we think that the lower-than-expected number of tables could hurt the company beyond 2018.”
The allocation for Wynn Palace, Wynn’s $4 billion, 1,706-room floral themed property anchored by floral displays throughout the building, is aimed at high-end players and not so much for mass-market visitors.
If Govertson’s analysis is correct, he expects two other American casino operators in Macau — Las Vegas Sands Corp. and MGM Resorts International — to get all the table allocations they’ve requested.
“We think the next two big projects that will come online — the Parisian Macau on Sept. 13 and MGM Cotai in the second quarter of 2017 — are in position to get a greater long-term total table grant than 150 tables,” he said. “As it relates to the Parisian, and in the context of the government’s explanation, no operator has historically focused more on nongaming and family-style entertainment than Sands China and we think Parisian will be no different, not to mention it is bringing online about 3,000 hotel rooms that are not five-star, as we believe the government wants more affordable rooms in market.”
Govertson said the same could apply to Sociedade de Jogos de Macau S.A., the holding company for SJM Holdings Ltd., operators of 17 casinos and two hotels in Macau under casino magnate Stanley Ho.
Ho will open his new Grand Lisboa Palace in early 2018.
“Based on our math, the government will have 947 table games remaining under a table cap first announced in 2012 after accounting for all the tables that have already been granted post-2012, including 150 to Wynn Palace,” Govertson said. “Under the assumption that Parisian Macau, MGM Cotai and Grand Lisboa Palace each get 250, this would leave the government with 197 tables in its pocket that could be granted, or not granted, as it sees fit.”
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Contact Richard N. Velotta at rvelotta@reviewjournal.com or 702-477-3893. Find him on Twitter: @RickVelotta
