GGRAsia – MGM China 2023 capex at least US$110mln: MGM ... - GGRAsia
Macau casino operator MGM China Holdings Ltd is committed to "US$110 million to US$150 million" in "capital expenditure" during 2023, says its United States-based parent MGM Resorts International.
The mention in the parent's 2022 annual report did not specify what portion of such spending – if any – related to MGM China's MOP16.7-billion (about US$2.1 billion) commitment to the Macau government for fresh investment in gaming and non-gaming activities and the "development of international tourist markets" as sources of customers, during the 10-year life of its new gaming concession, which started on January 1.
All six Macau operators had to make fresh investment pledges. In aggregate they represented nearly MOP119 billion in fresh spending, most of it on "exploring overseas customer markets and developing non-gaming projects," according to a Macau government announcement on December 16.
GGRAsia has approached MGM China – which runs MGM Macau and MGM Cotai – seeking clarification on whether its mentioned 2023 capital spend relates to its own concession commitment.
The MGM Resorts annual report filed on Friday reiterated an earlier assertion that about 90 percent – or MOP15-billion – of MGM China's concession-linked investment pledge would be "in non-gaming projects". MGM China's proposal in Macau's public tender process for new gaming concessions received the highest score from the Macau government.
The parent's annual report recapped that concession-related spending commitments would be "subject to increases of up to 20 percent in future years," if market-wide Macau annual gross gaming revenue (GGR) reached MOP180 billion. In 2022, market GGR was just short of MOP42.20 billion, compared to 2019's pre-pandemic tally of slightly under MOP292.46 billion.
As part of a series of presentations in December by the Macau operators after the award for fresh concessions, Pansy Ho Chiu King, managing director of MGM Grand Paradise SA, the local concession-holding entity of MGM China, said the group would up its "overseas sales networks to 30 locations and double the number" of its sales staff.
She stated: "We will host events in our overseas sales networks in Asia and the Middle East to attract foreign tourists directly to Macau and make concurrent efforts to provide direct transportation."
She also mentioned the group would bring a greater number of international-standard entertainment shows to Macau, and develop fresh art-related projects.
In early February, casino operator Wynn Resorts Ltd said it planned to spend between US$50 million and US$220 million in capital expenditure in Macau during the current year. The investment is part of the group's minimum MOP17.7-billion spending that the group has pledged to pour into Macau over the next 10 years, as a condition of getting a fresh gaming concession.
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