MGM China Holdings

    Website: http://en.mgmchinaholdings.com/

    Address: Avenida Dr. Sun Yat Sen, NAPE, Macau

    MGM China (HKEx: 2282) is a leading developer, owner and operator of integrated resorts. We are the holding company of MGM Grand Paradise, SA which holds one of the six gaming concessions/subconcessions to run casino games in Macau. MGM Grand Paradise, SA owns and operates MGM MACAU, the award-winning premium integrated resort located on the Macau Peninsula and is developing a second resort, MGM COTAI which is expected to more than double our presence in Macau. MGM MACAU is a luxury integrated resort inspired by the arts with every element of the resort infused with creativity and style. MGM MACAU has approximately 580 guest rooms and suites and boasts a number of distinguishing features, including the architecturally stunning European-inspired Grande Praça, housed under a soaring glass ceiling. MGM MACAU’s world class facilities include an Art Space dedicating over 5,000 square feet to display authentic works of art, conference and event facilities, brand-new Tria Spa, and seven signature restaurants and bars to fulfill any gastronomic craving. Our property is conveniently located on prime waterfront on the Macau Peninsula and is directly connected to the luxury retail shopping complex, One Central.MGM COTAI designed as the “jewelry box” of Cotai, plans to offer approximately 1,500 hotel rooms and suites, meeting space, high end spa, retail offerings and food and beverage outlets as well as the first international Mansion at MGM for the ultimate luxury experience. MGM COTAI will offer Asia’s first dynamic theater and a spectacle to wow every guest who steps foot in our resort. MGM COTAI is being developed to drive greater product diversification and bring more advanced and innovative forms of entertainment to Macau as it grows as a global tourist destination. The HK$24 billion project is expected to open in second quarter of 2017.MGM China is majority owned by MGM Resorts International (NYSE: MGM) one of the world’s leading global hospitality companies, operating a portfolio of destination resort brands including Bellagio, MGM Grand, Mandalay Bay and The Mirage.

    People

    Wendy Yu

    Wendy Yu is the senior vice president of human resources of MGM China, and has been with the company since July 2009. She has leadership responsibilities for all HR functions at both MGM MACAU and MGM COTAI. She started her hospitality career with the Hyatt Regency Macau and then became the Human Resources Manager of Holiday Inn Macau from its pre-opening stages. Moving from a corporate to an educational role,Yu spent one year as a Lecturer for the Institute of Tourism Education in Macau after her hotel job assignment in Shanghai with the New World Group. She then moved to the Westin Resort, Macau as Director of Human Resources.Yu subsequently joined Wynn Resorts (Macau) S.A. in 2003 as Vice President — Human Resources and was responsible for the human resources department for the opening of Wynn Resorts (Macau) S.A. Before joining our Company, Yu spent a year with Starwood Hotels and Resorts for their Sheraton and St. Regis pre-opening project in Cotai.

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    Melco, MGM seen gaining market share: Bernstein

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    MGM Cotai

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    Grant Bowie expresses optimism for 2019 performance

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    MGM China issues senior notes to pay down debt

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    MGM China posts strong gaming growth in 19Q1

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    Macau Q1 earnings likely to surprise to the downside: MS

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    Macau IR operators participate in green week

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    MGM announces non-management discretionary bonus

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    Shift in geopolitics poses risk for Macau operators

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    James Murren

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    Industry should outperform Hang Seng Index in 18H2: MS

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    MGM organizes China culture seminar

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    Fitch says MGM credit profile improving

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    Macau operators turn to electric vehicles

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    MGM celebrates CNY with 200 senior members from women association

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    MGM China Q4 revenue gains, led by mass

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    Kenneth Rosevear steps down from MGM China

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    MGM Cotai announces February 13 grand opening

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    MGM workers urges DICJ to look into nausea-inducing gaming tables

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    MGM China staff protests over pay and working conditions

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    MGM stock drops on Cotai delay

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    MGM Cotai opens on Jan 29, celebrations to follow

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    Macau GGR set for new records: Bloomberg

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    MGM Cotai launches grand opening offers

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    MGM China EBITDA softer than expectations

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    MGM Cotai wins six awards at Asia Property Awards 2017

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    MGM wins top accolades at HR Innovation Awards

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    Long-haul travellers missed Macau in Golden Week

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    Macau EBITDA growth to slow in 17H2

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    Golden Week GGR mix disappoints; shares drop

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    MGM China estimates lowered after delay announcement

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    MGM expects delay for Cotai opening

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    MGM commits to sustainable recovery post typhoon Hato

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    MGM China announces SME relief program

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    Macau operators contribute to relief efforts

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    MGM China profit hurt by weak mass and VIP revenue

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    MGM China Q2 profit declines on weak mass and VIP revenue

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    Govt looks to amend terms for concession renewal

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    Macau May revenue surges past expectations

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    MGM shareholders approve final dividend

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    Macau casino operators seek sports betting opportunities

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    Sands China sees more MICE interest; bridge to help

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    Macau 17Q2 GGR to decelerate as VIP slows

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    MGM China 17Q1 revenue gains on mass hold increase

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    Mass, slots drive MGM China 17Q1 results

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    Margin pressure seen rising as VIP gaming picks up

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    MGM Cotai

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    March GGR growth seen moderating

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    EBITDA targets achievable for 2017, Deutsche Bank says

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    MGM Cotai announces Chinese name, unveils golden lion

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    MGM China announces salary increase

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    MGM China announces final dividend

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    MGM China 16Q4 revenue edges higher

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    MGM China opening no later than Oct 1: analysts

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    Casino operators restart marketing ops

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    Macau casino stocks rise following Japan casino bill news

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    Sands and MGM not guilty of smoking law violation

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    MGM China posts better than expected EBITDA

    Casino operator MGM Resorts International reported better than expected results for the three months ended September 30, 2016. According to a press release from the company, the Las Vegas based operator said it had delivered the best quarter in terms of net revenue and adjusted property EBTIDA generated by its domestic results. The parent firm […]

    MGM Cotai slated for 17Q2 launch

    MGM China has confirmed that its HK$24 billion ($3.1 billion) Cotai resort will open in the second quarter of 2017. “We believe it [MGM Cotai] will be well received by the market and we are confident to capture the growth opportunities of Macau,” said Grant Bowie, chief executive officer and executive director of MGM China. […]

    Pansy Ho looks to tourism facilities on reclamation areas

    MGM China Holdings Ltd co-chairperson and executive director Pansy Ho says she might apply for more tourism facilities on the city’s reclamation areas in the future, reports Macau Business Daily. Ho, who is also the the vice chairman and secretary-general of the Global Tourism Economy Forum added she hoped the government would support her suggestions. […]

    Hotel occupancy flat in Golden Week: Bowie

      MGM China CEO and executive director Grant Bowie says he expects hotel occupancy to be flat during Golden Week. Bowie made the comments to local reporters at an MGM event on Thursday. “Our occupancy is looking quite strong and positive, but we all understand now that these traditionally large holidays are not as busy […]

    MGM kicks off cotai recruitment campaign

    Casino operator MGM China Holdings Ltd is planning to roll out a series of mass recruitment fairs for its upcoming MGM Cotai development, scheduled to open in 17Q2. The fairs will be organized in collaboration with Macau Federation of Trade Unions (FAOM), Federation of the Macau Residents Association (UGAMM), Macau Gaming Industry Laborers Association (MGILA) and the […]

    GGR stabilizing but soft recovery ahead: Fitch

    Fitch’s Alex Bumazhny said that the firm is projecting approximately a 5 percent decline in Macau gaming revenue for 2016. Year-to-date revenues are down 9.1 percent, but there are softer year-on-year comparisons ahead, plus the market should get a boost from the Wynn Palace and The Parisian openings, Bumazhny, Fitch’s senior director, corporate ratings – […]

    MGM Resorts closes acquisition of additional stake in MGM China

    MGM Resorts International on Thursday announced that it has closed on its previously announced acquisition of 188,100,000 ordinary shares of its subsidiary MGM China Holdings Limited from Grand Paradise Macau, according to a press release. As a result of the transaction, the Company now owns approximately 56 percent of MGM China’s outstanding common shares, leaving […]

    Wynn Palace cannibalization underestimated: MS

    Wynn Palace’s cannibalization of its Peninsula casino’s premium mass and VIP businesses is underestimated, said brokerage Morgan Stanley in a note on Sunday. In its recent Macau trip, the brokerage said it was also concerned with the ramp up of Wynn Palace, which could be slower than expected due to slow market growth and a […]

    MGM Resorts open to buying even more shares in MGM China

    MGM Resorts International may be willing to buy even more shares of MGM China Holdings, said chairman and chief executive James Murren. However, any such purchases would be “incremental” to the 4.95 percent that MGM Resorts announced earlier in the week it would add. On Tuesday, MGM Resorts announced it had entered into a transaction […]

    MGM Resorts to increase stake in MGM China

    MGM Resorts has announced it has entered into a transaction to acquire 188.1 million shares of MGM China from businesswoman Pansy Ho. The transaction will see MGM Resorts own 56 percent of MGM China (up from 51 percent), with Ms Ho’s stake in MGM China down to 22.5 percent (from 27.4 percent). “MGM Resorts is […]

    MGM China sees stabilizing mass market

    MGM China Holdings reported better-than-expected net income for the first half of 2016, attributed to an increase in premium mass-market gamblers and cost cutting measures. During the six-month period, MGM China recorded total revenue of HK$7.2 billion (US$928.3 million) in 16H1, down by 22 percent year-on-year. Adjusted EBITDA was HK$2.0 billion compared to HK$2.4 billion […]

    Melco Crown to underperform, faces stiff competition

    Analysts are warning that increasing competition from rivals will likely stifle any uplift for Melco Crown in Macau. While the UBS team has predicted a potential demand recovery in Macau in the near term, the brokerage also predicts Melco Crown’s rivals — Wynn Macau, MGM China and Galaxy Entertainment will likely to outperform the sector, […]

    Slight possibility for MGM Cotai to open in 17Q2: Bernstein

    While MGM Cotai is still on track for late 17Q1 completion, there is a possibility the opening may hit Q2, said Bernstein in a note on Friday. “MGM China expects to complete all the government processes by the end of this year and maintains its target date of late Q1 2017, though there is the […]

    Macau to tighten visa rules for casino executive positions

    The Macau government is reportedly tightening its visa policy for executives working in the territory’s casinos in an effort to promote more locals into managerial positions. The Human Resources Office of Macau told the Portuguese-language Jornal Tribuna de Macau that the bureau can deny requests for renewals of non-resident casino executives’ working visas if “there […]

    MGM China to generate $600 mil EBITDA in 2017

    Fitch Ratings said it predicts MGM China to generate around $600 million of EBITDA in 2017, according to a note on Tuesday. The ratings agency said the $600 million of EBITDA factors in about $200 million EBITDA at MGM Cotai and approximately 20 percent EBITDA decline at MGM Macau. Fitch also affirmed the IDRs for […]

    MGM China Q1 posts results shy of forecasts, sees stabilization

    MGM China posted a steep drop in Q1 earnings and revenue, but joined the growing chorus of Macau operators in saying they see signs of stabilization in the mass market. MGM China recorded total revenue of HK$3.6 billion, a decrease of 25 percent from a year ago, but narrower than the 31 percent year-on-year decline […]

    MGM China and Sands have most productive staff; Morgan Stanley

    MGM China and Sands China were found to have the most efficient staff in their respective regions in Macau, according to a recent report from Morgan Stanley. Analysts compared all the operators based on company EBITDA to average number of staff ratio, and found that MGM China generated a higher EBITDA per person employed than […]

    Las Vegas Sands boss says more discounting of Macau rooms to come

    Las Vegas Sands president and chief operating officer Robert Goldstein believes room rates may fall when several new properties come on line in Macau this year, local media reports. Goldstein, who was quoted at the JP Morgan Gaming, Lodging, Restaurant and Leisure Management Access Forum in Las Vegas last week, said properties to be opened […]

    Macau’s major casino operators launch “Macau loves locals” campaign

    Macau’s six leading casino resort operators have joined forces to offer exclusive special deals to local residents as part of a corporate social responsibility initiative.  Covering a wide-range of non-gaming offerings, Macau Loves Locals features award-winning luxury hotel rooms, family-friendly shows and entertainment, refreshing spas, world-renowned Michelin-starred restaurants, and many other non-gaming elements. This new […]

    MGM China head says Macau gaming market is stabilizing

    MGM China chief executive officer Grant Bowie says the gaming market in Macau is stabilizing, driven by the growth of the mass segment, local media reports. The comment was made during the presentation of MGM Resorts International’s latest quarterly results. “We are seeing some stabilisation in the market led by the mass segment. GGR has […]

    MGM Resorts delays Cotai opening amidst market uncertainty

    MGM Resorts International said it’s delaying the opening of its new resort on Cotai due to the soft market conditions in Macau and the timing of other openings. MGM said it made the strategic decision to move the opening of its MGM Cotai development from the fourth quarter of 2016 to the end of the […]

    Wynn concerned about Cotai delays, warns of penalties

    Wynn Macau has sent a letter to the contractor developing its $4.1 billion Wynn Palace on Cotai warning of penalty payments should construction milestones fail to be met. The opening of the resort has already been delayed by three months to June 25th from an original launch plan in March. “We are concerned that with […]

    Casino stocks tumble as China macro woes add to pain

    Shares in Macau’s casino operators started the year on a black note, with all recording sharp losses after weaker-than-expected Chinese economic data added to yet another month of steep declines in local gaming revenue. SJM Holdings was the biggest loser, closing the first trading day of the year down 4.5 percent, followed by Sands China, […]

    MGM China and Sands China consider raising staff wages

    MGM China Holdings Limited and Sands China Limited will consider increasing the pay of their staff in 2016, according to local media.   MGM China CEO Grant Bowie said he had not yet made any decision about a salary hike. He was quoted as saying this year has been a difficult year for the company […]

    MGM China celebrates topping off for Cotai resort

    MGM China celebrated the topping off of MGM Cotai, the second integrated resort of the casino operator in Macau. MGM Cotai, designed like a jewelry box, plans to offer approximately 1,500 hotel rooms and suites, meeting space, high end spa, retail offerings and food and beverage outlets as well as the first international Mansion at […]

    Galaxy leads in October VIP market share

    Galaxy led in VIP market share gain in October by 6.3 percent month on month, boosted partly by win rate and at the expense of MGM which had a strong and lucky month in September, HSBC Research said. MGM’s share dropped 5.7 percent, while Sands relatively outperformed by adding 0.9 percent to its share.  Sands […]

    MGM swings to Q3 profit, announces plans for REIT

    MGM Resorts International (MGM) posted better-than-expected Q3 earnings as strength from its U.S. operations outweighed a 33 percent decline in Macau revenues and announced a plan to set up a real estate investment trust. While conceding that the REIT plans may take up most of the headlines, Deutsche Bank called the 3Q report “a truly […]

    Macau casino stocks plunge on Neptune warning, visitor concern

    Casino stocks traded in Hong Kong plunged to multi-year lows on Tuesday, with losses spilling over into U.S. trading, after junket operator Neptune Group warned it may be forced to exit the business, while concern over Golden Week tourism numbers added to the gloom. SJM Holdings fell almost 7 percent to a five-year low, Wynn […]

    Macau average daily revenue higher in September than August

    Macau’s gross gaming revenue for the month through September 6 was MOP4.1 billion ($513.6 million), according to Bernstein Research channel checks. Last week’s average daily revenue was MOP683 million, 14 percent higher than August’s ADR of MOP601 million.  “It is the most robust week since late May 2015. We believe part of the strength may […]

    MGM 15Q2 profit tumbles, but tops forecasts

    MGM Resorts International posted lower Q2 revenue and earnings, dragged down by a slump in its Macau operations, but announced a “profit growth plan” designed to boost adjusted earnings before interest, tax, amortization and depreciation by about $300 million. Despite the decline year-on-year, the results were slightly better than most analysts had expected. “We are […]

    Melco Crown won’t show margin sustainability in 15Q2: Sterne Agee

    Sterne Agee says Melco Crown Entertainment will not show quarter-on-quarter margin sustainability in 15Q2 in the same way Las Vegas Sands and Wynn Resorts did in their 2Q15 results. Analyst David Bain said the reasons for this include Melco Crown’s employee count build-up, which is more intense than the others due to the proximity of […]

    Gaming stocks winning streak temporary

    Macau casino operators are leading gains on Hong Kong’s stock market for the first time in nine months, reported Bloomberg. Citing Macquarie Investment Management and Pictet Asset Management, Bloomberg says the winning streak is temporary. MGM China Holdings, Wynn Macau. and Sands China, rose at least 20 percent in July, defying China’s stock rout and […]

    Smoking lounge planning, time and money wasted if total ban is enforced

    Macau’s casino operators will have wasted a great deal of time and money if they are forced to abandon smoking lounges in the event of a blanket smoking ban, according to local media. The lounges were located to make them convenient, so that the customers could see them from all areas in the casino, said  Mel […]

    Secretary general of Macau Staff Association says smoking survey not accurate

    The secretary general of the Macau Gaming Enterprises Staff Association said that the results of a recent survey that shows most casino employees are in favor of smoking lounges are skewed due to respondents being under pressure to give certain answers. Kelvin Choi Kam Fu said that when taking part in the survey some casino […]

    Two thirds of casino employees back smoking lounges: survey

    Macau’s six casino operators jointly announced the findings of an independent study into the attitudes towards proposed tobacco control legislation, which would ban all smoking inside casinos, saying a majority of employees back the retention of smoking lounges. The initial results of the study, conducted on behalf of Galaxy Entertainment Group, Melco Crown Entertainment, MGM […]

    MGM China completes refinancing, boosts loan facilities to $3b

    MGM Resorts International said its MGM China unit has completed the refinancing of its Hong Kong-dollar denominated senior credit facilities, upping the size of funds available and providing the company with the flexibility to develop its MGM Cotai property. The restated accord consists of a term loan equivalent to U$1.55 billion, up from the previous […]

    Grant Bowie dismisses merger speculation

    Grant Bowie, the CEO of MGM China has declined to comment on speculation that MGM China’s parent company, MGM Resorts International, may merge with US casino operator, Wynn. After CNBC host Jim Cramer said there was “speculation” the two operators would merge – without citing his sources – Bowie has moved to quash the rumors. […]

    MGM China grants share options to CEO, others

    MGM China said its board has offered to grant options to subscribe to just over 12.9 million shares to CEO Grant Bowie and “certain other eligible persons.” The award is being made under the share option scheme adopted by the company on May 11th, the company said in a Hong Kong Stock Exchange filing. The […]

    Investors not cautious enough on Macau, Morgan Stanley says

    Investors are still not cautious enough on Macau gaming stocks despite the sell off that has resulted in a 37 percent underperformance relative to Hong Kong’s benchmark Hang Seng Index this year, Morgan Stanley says in a note. “While sell side is generally negative, we see investors are inclined to add positions. We see further […]

    MGM Resorts makes capital expenditures of $292 million in 15Q1

    MGM Resorts made capital expenditures of $292 million in the first three months of 2015, of which $146 million related to MGM China, the company announced in a filing. In a quarterly report filed with the US Securities and Exchange, MGM said its capital expenditures at MGM China included $132 million related to the construction […]

    MGM Q1 earnings beat forecasts: Cotai slipping?

    MGM Resorts International (MGM) Q1 adjusted earnings were well above analysts’ expectations, but revenue was weaker than expected, dragged down by Macau. Net income attributable to MGM rose to $169.9 million, or $0.33 per diluted share, from $102.7 million, or $0.20 per diluted share, a year earlier. The per-share comparison was skewed by a 12 […]

    Union Gaming maintains Buy ratings for MGM, SJM

    Union Gaming says it maintains its Buy ratings for both MGM and SJM following the company’s first quarter 2015 financial results. MGM’s total revenue less promotional allowances edged down to $2.33 billion from $2.63 billion a year earlier, missing analysts’ mean estimate of $2.40 billion. But Union Gaming says it is reiterating its Buy rating […]

    MGM China CEO optimistic about Macau

    MGM China CEO Grant Bowie says the gaming market will gradually stabilize despite 10 months of consecutive revenue declines, and that the public need not be pessimistic. Bowie said despite Macau’s testing times it is still a successful gaming market, he told Chinese-language newspaper the Macao Daily. As China’s anti-graft campaign forces operators to switch […]

    MGM Q4 results miss forecasts, MGM China to pay special dividend

    MGM Resorts International posted worse-than-expected Q4 results as Macau revenue fell, but said its MGM China unit will pay a special dividend. The company reported reported a loss of $342.3 million, or 70 cents a share, in the last quarter of 2014. On an adjusted basis, it had a profit of $0.01, below the $0.07 […]

    Melco, MGM outshine peers in Q3

    Melco Resorts & Entertainment and MGM China outperformed their peers in the latest reporting season, as the ramp up of new product offerings drove growth.

    Asia’s IRs power up green initiatives

    As concern mounts about the global environment, many of Asia’s giant IRs are taking significant steps to minimise their impact, investing heavily in green technologies and other waste control initiatives.

    Bright future seen for gaming growth

    Despite short-term headwinds from China’s slowing economy and trade friction with the U.S., analysts remain optimistic Macau will retain its crown as Asia’s top gaming hub.

    No clarity in casino concession countdown

    The first of Macau’s six casino concessions expire in less than 18 months, though the operators who have invested billions in the territory still have no clarity as to how, or even if, those licenses to operate will be renewed.

    Trade war creates headwinds for Macau gaming stocks

    Macau gaming stocks are feeling the heat from the trade war between the U.S. and China, falling to their lowest levels in a year, with some analysts cutting their growth forecasts on concern for a slowdown in China’s economy.

    Japan local governments gather at the starting line

    The year 2017 saw a distinct acceleration in the race to obtain licenses to build and operate Japan’s first IRs. While everyone agrees that the potential scope of the market is vast, without the precise locations and the terms of regulation yet being clarified, estimations of the ultimate size of this market remain little more than guesswork. Progress in the year was once again stalled by politics, though operators are hoping to push forward in 2018 with both the legislative framework and their own groundwork.

    Gaming-linked candidates tout social fund, workers’ rights

    Macau’s sixth Legislative Assembly elections will take place on Sunday, with gaming-related candidates proposing more concessions, a social fund and better workers’ rights as part of their platforms. Seven gaming-linked candidates are competing as part of a 24-strong field for the 14 available seats.

    Responsible values

    As operators around Asia vye for licenses in new markets, one corporate social responsibility expert suggests they should change their approach. Jan Jones Blackhurst, executive vice president, public policy and corporate social responsibility, at Caesars Entertainment says not enough is being done to explain what an IR is and the benefits it can bring to society. Not only can a good CSR program help to alleviate perceptions about gambling harm, it can also be a revenue driver. 

    Concession clarity lacking as deadline approaches

    In just three years, the first of the licenses awarded to Macau’s concessionaires expire and, despite the billions of dollars invested by the operators in the market, there is still no clarity over the renewal process. There is no mechanism under the current law for automatic renewal which, as the deadline approaches, is leading to increasing concern in the market as to the tack the government may take. Views on the ground are mixed.

    Attracting MICE

    Macau saw a 62 percent spike in MICE visitation in the first quarter, helped by government subsidies, though the territory still faces considerable hurdles to reach its full potential as an events and exhibitions destination. Macau has lost out to regional rivals due to a lack of hotel capacity, limited venues, poor transport links and a branding problem and although problems are gradually being addressed progress is slow.

    Looking for growth

    While the Macau market still has plenty more to give, operators are starting to look elsewhere for future growth potential 

    Macau stock rally seen losing steam

    Macau’s gaming stocks have rebounded to trade at two-year highs, tracking the recovery in gross gaming revenue, however analysts warn against over optimism, saying growth may be nearing its peak, at least in the short term.

    Non-gaming revenues rise, but offering fails to inspire

    Chinese Premier Li Keqiang praised Macau’s efforts to diversify its economy during a three-day visit last year, but market experts say operators are still trying to get the recipe right when it comes to non-gaming attractions and face an uphill struggle. Revenue from non-gaming has improved, however, Macau is still far from being a destination that will attract visitors for its tourism offering off the casino floor. 

    Marketing to the masses

    Galaxy Entertainment added to its range of non-gaming attractions in June, opening Macau’s first Apple Store, as operators seek to appeal to a broader market to replace the shrunken VIP sector. Macau now gets around 45 percent of its revenue from the mass sector, up from the low point of 26 percent in 2Q11. Although the mass sector has significantly higher margins than the VIP at 25 percent to 55 percent compared with 10 percent, for most, that shift is still not yet showing through in the bottom line. Getting the marketing message right may be key to tapping the mass market.

    Macau 16Q2 earnings to dip to five-year low

    Macau’s six casino operators will begin reporting Q2 results later this month, with analysts expecting a mixed bag. Though operators say they are seeing signs of stabilization in the market, that is unlikely to be reflected in the bottom line, at least for now. The consensus is that revenues and EBITDA will fall from the prior quarter and will hit the lowest level in five years.  

    Tourism blueprint is good start but hurdles high

    Macau’s tourism development masterplan, which aims to transform the VIP gaming hub into a mass market, diversified leisure destination, forecasts as many as 40 million tourists a year by 2015. The blueprint contains a clear vision of what the government wants for the future, with tourists staying longer and spending more on non-gaming activities. However, tourism industry experts say Macau as a family destination faces significant headwinds and stakeholders still haven't reached consensus on what brand Macau should be. 

    Fixing ailing Macau casinos: A few words of experience

    Macau industry observers, gaming analysts, and even casino operators are now admitting that the decade-old party has run out of steam, if not over. The “build it and they will come” maxim and its attendant hubris that has characterized the Macau gaming industry since 2003 are now causing deep concern to operators and investors alike. To counter the downturn, the knee-jerk reaction has been to cut costs, directly affecting customer service. This could be a disastrous strategy. According to a recent Gartner study, 89 percent of the companies surveyed will be competing on the basis of customer experience in 2016, nearly a three-fold increase from five years ago.

    Hengqin projects take shape as Macau looks for a crowd-puller

    A Macau casino company CEO recently told a group of investors, “Hengqin is the most underreported story about Macau.”While many in the gaming and hospitality industries increasingly take note of Hengqin’s future plans, projects are beginning to rise from its ground. Cratered construction sites of a Cotai magnitude, along with extensive underground infrastructure, reveal the subterranean clues of projects yet to come. Many analysts and industry observers see the development of the island’s tourism facilities as being the real game changer for Macau as it tries to transform itself into a mass market leisure destination.  

    Macau’s operators pick at costs as revenue slide continues

    Macau’s casino operators have already cut the low hanging fruit when it comes to reducing operating costs and are now struggling to further pare expenses as the slump in the market drags into its 19th straight month.With labour cuts not an easy option in Macau, the casinos face a juggling act in scaling back customer service standards without losing the customer. They are looking for creative ways to cut back behind the scenes and make every penny count.  

    Macau regulatory round up — current state of play

    The Macau Chief Executive is the ultimate government authority in determining policy, licensing and regulating the operation of casino games of chance and other gambling activities in Macau. In exercising such powers, the Macau Chief Executive is assisted by the Gaming Inspection and Coordination Bureau, best known for its Portuguese acronym “DICJ”.

    Macau’s challenge: Do policy-driven changes make for a successful market?

    At this year’s Macau Gaming Show, experts were called upon to ponder whether Macau, the world’s largest gambling hub, can follow the example of Las Vegas and transform itself into an entertainment capital for the mass market.Views varied, but the one common thread was that it was going to be a long and painful transition. While Las Vegas revenue crumbled over a period of years following the financial crash of 2007, the Macau market has fallen off a cliff in little over a year largely as a result of a government policy decision in neighbouring China. That creates challenges for those trying to reinvent the market.

    Macau operators win smoking ban reprieve, but for how long?

    Macau’s casino operators, who have put up a united front in opposing a proposed blanket ban on smoking, may have won a battle with signs the government is softening its stance, but have not yet won the war.After appearing firm in its resolve to make smoking in casinos a thing of the past, the government has mellowed its tone and says it will consider keeping the lounges. But the onus will be on the operators to prove they are not harmful to health and that may be a tough call.

    Macau changing its game

    Macau Chief Executive Fernando Chui Sai On sent a clear message to the casino industry in the first policy address of his second term in office this week - the government is no longer just paying lip service to diversifying the economy away from gambling. The territory, which in just over a decade has grown its industry to be more than seven times the size of Las Vegas, is currently dependent on gambling for 85 percent of its income. However, after nine straight months of declining revenue that triggered a 17 percent contraction in Q4 gross domestic product, Chui said the industry is going through a phase of “adjustment.”The territory, which in just over a decade has grown its industry to be more than seven times the size of Las Vegas, is currently dependent on gambling for about 85 percent of its income. However, after nine straight months of declining revenue that triggered a 17 percent contraction in Q4 gross domestic product, Chui said the industry is going through a phase of “adjustment.”The government has cut its projected revenue from gambling receipts this year to average 20 billion patacas ($2.5 billion) a month from 27.5 billion patacas, while analysts are forecasting a second year of contraction, possibly by as much as 30 percent, according to Deutsche Bank.In his address, Chui said the government will strengthen its oversight of the casino industry as licenses come up for renewal and may require the companies to regularly submit their investment and development plans for review, in particular with regard to non-gaming activities. A tourism panel, under Chui’s supervision, will draft a five-year plan for stable casino growth that will make the region less reliant on casino revenue. Macau, Chui said, will become a center of tourism and leisure travel.

    No end in sight to Macau slump as analysts cut estimates

    As the first quarter comes to a close, there seems to be little reprieve for Macau’s battered casino stocks, with analysts continuing to cut estimates on the back of weak Chinese New Year revenue and an ongoing stream of negative news.Although the February fall in gross gaming revenue was the worst on record at almost 49 percent, it wasn’t as bad as some had been expecting. Still the consensus is that the market has not reached a bottom as yet. Comments from both analysts and operators continue to reflect longer-term optimism, but agree there remains little near-term visibility.“February was very weak especially given Chinese New Year and a lot of analysts are revisiting their forecasts,” said Alex Bumazhny, an analyst at Fitch Ratings, which this week predicted a 4 percent decline for 2015 GGR. “The market is banking on a slow down in premium mass and on the whole it’s not looking so good for 2015.”It’s also unclear as to whether the regional operators which saw a sharp uptick in Q4 VIP revenue as high rollers fled Macau, will continue to benefit as China pledges no let up in its anti corruption drive.JP Morgan in a recent report cut its earnings and share price target estimates by 25 percent and said it now expects an 18 percent decline in 2015 GGR, while Deutsche Bank issued perhaps the most bearish forecast so far, predicting a 30 percent drop and slapping a sell rating on the Macau five operators apart from SJM Holdings, which was already rated sell.JP Morgan said it doesn’t expect a pick up in share valuations until April, pointing also to a series of regulatory overhangs in the market. Deutsche Bank says the GGR decline may extend into 2016.The Macau government will conduct an interim review of the gaming sector this spring and may provide more clarity on new table allocations to casinos. It is also likely to discuss the issue of inbound mainland visitors with Beijing and whether their movements will be further restricted. The government last year clamped down on transit visas to third country destinations and has said it may review the Individual Visa Scheme.“We believe the market would not give the benefit of the doubt, until such regulatory issues are proven to pass without any significant surprises,” the bank said.Citi is more upbeat, saying it believes the market may be at a turning point, but still sees no signs of recovery in the VIP sector. The firm recently cut its forecasts for 2015 market GGR to negative 16 percent, from its prior estimate for a drop of 4 percent.The Q1 results will follow on from a set of financial statements for Q4 that, while gloomy, were largely in line with expectations.“The results were more or less consistent with what we expected,” Fitch’s Bumazhny said. “Wynn lost some market share and that appears to have continued in Q1 which is a concern.”Wynn Macau, which currently has just one highly VIP focused property, posted the biggest drop in quarterly revenue so far. (Galaxy Entertainment will report on March 19th and SJM Holdings didn’t split out Q4 figures).Net revenues were $761.2 million, a 32 percent decrease from the $1.12 billion generated in the fourth quarter of 2013. Adjusted property EBITDA in the fourth quarter of 2014 was $241.2 million, down 35.5 percent.VIP turnover was down almost 40 percent, however the group has been renovating its casino floor which resulted in a drop in VIP tables to 244 in Q4 from 273 in the prior year. That renovation, which includes the addition of two VIP rooms and a new relationship with top junket operator Sun City, was scheduled for completion ahead of the Chinese New Year.Despite the weak Q4 for Wynn, analysts are generally reasonable bullish about its outlook.Sterne Agee’s David Bain wrote in a recent report that his buy recommendation on the stock remains intact and that investors have given little credit for its renovations and still less “to a top tier junket operator occupying one of its rooms that currently does not do business at its facility.”Bain and analysts at Citi also pointed to the fact that the opening of its new Wynn Cotai will be transformational for the company. Citi said the new property is likely to be the “premier” resort on Cotai, although the company indicated in its Q4 earnings call that the opening may be delayed.MGM China’s Q4 was also weaker than most had expected. Revenue fell 22 percent to $719 million, while adjusted EBITDA dropped 22 percent to $185 million.Like Wynn, MGM also cut Macau VIP tables in the quarter to 195 from 235. VIP table games revenue dropped 39 percent, while mass floor revenue jumped 19 percent, reflecting an increase in main floor games up to 228 from 195. UBS analyst Robin Farley points out the mass performance in the quarter was “impressive,” above the firm’s 18 percent growth forecast and the market consensus for a drop of 16 percent.The group said it remains on schedule for the planned opening of MGM COTAI in 2016. The expected total development cost is approximately HK$23 billion, excluding land costs and capitalized interest. It also announced plans to spend $100 million on revamping the main floor at its existing MGM Macau.Sands China as expected benefited from its bias towards the mass market and its higher capacity than other operators.Total net revenue declined 16.2 percent in the quarter to $2.12 billion, while adjusted property EBITDA decreased 14.7 percent to $713.2 million. Mass revenue was down 9 percent, while premium mass was down 17.5 percent. VIP volume was down 42 percent.“In Macau, we like its peer-high weighting to mass gaming (higher visibility and margins than VIP), peer-high hotel room capacity amidst strong visitation growth and gaming position lead in Cotai,” Sterne Agee’s Bain said.The company noted on its earnings call that there is room for improvement to its Q4 margin of 34 percent going forward, as the drop in the mass market was so rapid towards the end of the year that it had not had time to adjust expenses.However, analysts also noted that the company is no longer giving a specific time frame for the opening of its Parisian Macau resort, saying that the target remains “sometime in 2016.” UBS’ Farley says that the U.S. casino giant will need the Macau government to approve more labor to achieve that date.Melco Crown saw its Q4 revenue drop 20 percent, although again analysts are slightly more upbeat about the company’s prospects given the opening of its Studio City property later this year. The consensus view is still that added capacity will drive growth, although Deutsche Bank’s latest note even casts doubt on this theory.The opening of two new gaming venues this year isn’t expected to boost demand, and the market is underestimating pressure on casino operators’ profit margins, the German bank’s analysts noted this week.Melco’s adjusted property Ebitda was down 29 percent to $278.6 million.SJM’s annual gaming revenue dropped 8.8 percent to HK$79.3 billion, but CEO Ambrose So said it had been a challenging year, with a deterioration in the last half. So said that investors should not expect any sharp rebound in casino earnings in 2015, although is cautiously optimistic that revenue will stop falling in the second half of the year.  ******MPE  
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