The Macau subsidiary of MGM Resorts International delayed the opening of the $3.45 billion MGM Cotai project Thursday, blaming slowness in the Special Administrative Region’s approval process.
The hotel-casino, which has now seen four delays in its planned opening, was expected to be unveiled next Monday. In a statement to the Hong Kong Stock Exchange, MGM China said the opening would now take place sometime in February.
Analysts said they hoped MGM Cotai would open before the Chinese New Year celebration.
Shares in MGM China dropped more than 7 percent on the Hong Kong Stock Exchange following the announcement. MGM Resorts shares on the New York Stock Exchange declined 2 percent, or 82 cents, to $36.81.
Early this week, Macau officials awarded MGM Cotai 100 new-to-market table games, as well as an additional 25 table games next year. The allocation was below the 150 table games Macau regulators awarded to Las Vegas Sands Corp.’s Parisian and Wynn Resorts Ltd.’s Wynn Palace in 2016.
MGM Cotai has enough capacity for 500 table games. Regulators also approved MGM to transfer 77 gaming tables from its MGM Macau resort in the downtown district to the new Cotai property.
Analysts said the lower table game allocation puts MGM at a disadvantage.
Bernstein gaming analyst Vitaly Umansky said the reduced table games at MGM Cotai could help Wynn’s three Macau properties and the City of Dreams resort on Cotai, which is operated by Melco Resorts & Entertainment.
However, Union Gaming Securities analyst Grant Govertsen, who is based in Macau, said the “excess table capacity harvested from MGM Macau on the peninsula, in addition to the new tables being allocated by the government, will be enough to achieve current revenue and cash flow forecasts for the company.”
Macau’s tourism office said MGM Cotai has not received the approval for its hotel operating license and other aspects in the property. The office said the license application for the opening was waiting on favorable opinions from related technical departments.
Morgan Stanley gaming analyst Praveen Choudhary told investors a key reason for the lower number of gaming tables could be the license expiration of MGM and rival SJM Holdings, which are coming up in March 2020. Once the licensing matter is finalized, MGM could earn additional table games for Cotai.
MGM Cotai could have lower cash flow than estimated due to the 25 fewer gaming tables, but the property’s short-term forecasts could still be reached, Choudhary said.
In a separate filing with the Hong Kong Stock Exchange, MGM said the Cotai’s resort’s construction budget was unchanged.
MGM Cotai has 1,390 hotel rooms and has taken five years to build.
