MGM Cotai Opening Postponed From Late 2017 To Early 2018

MGM China Holdings, the Asian arm of MGM Resorts International recently announced that its $3.4 billion MGM Cotai casino will not open in the fourth quarter of 2017 due to the number of delays that has stopped the flow of work. The MGM Cotai casino is expected to open to the public on January 29, 2018.

MGM China had postponed the opening of its Cotai property earlier this year and CEO James Murren said at that time that the property would be opened in time for China’s Golden Week which runs from October 1 – 8. MGM Cotai will now open in 2018 before the Chinese New Year week long holiday which starts from February 16.

During this festival period, millions of Chinese leave the Mainland and visit Macau to celebrate and have fun at the casinos.

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One of the main reasons for the delay was because Typhoon Hato devastated Macau in August 2017. This was the worst typhoon to hit the peninsula in the last 53 years and cause immense damage to property and businesses. The casino industry was also impacted and MGM Cotai suffered damage during the typhoon.

MGM China submitted a report to the Hong Kong Stock Exchange stating that an assessment of the damage was carried out on MGM Cotai and a revise scheduled was finalized to make the necessary repairs and obtain the required government approvals so that the mandatory licenses could be obtained.

In a statement, Deutsche Bank Securities Inc analysts Carlo Santarelli and Danny Valoy said

While the announcement was somewhat expected, we believe the delay is likely to cause some frustration. Macau stocks tend to rally into openings, thus, the delay pushes the potential MGM China stock rally into calendar 2018

The Cotai district has become home to some of the biggest casinos in Macau with the opening of the Wynn Palace in August 2016 and Las Vegas Sand’s Corp’s Parisian Macao in September 2016. The two multi-billion dollar casino resorts have helped arrest Macau’s 26 consecutive months of GGR decline and things began to change for the better for the gaming industry from August 2016.

Japanese brokerage Nomura also stated that MGM International might have delayed its MGM Cotai launch in order to make sure that everything was perfect before its launch, just like it did in the case of its newly opened MGM National Harbor casino in Maryland which opened in December 2016 and has turned out to be a great success.

Adrian Sterne

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