Macau gaming table cap already surpassed: Daiwa

The Macau government may have already surpassed the number of gaming tables it had planned to allocate by the end of 2017, according to analysts at Daiwa.

Given the government’s three percent cap on gaming table growth, and looking at the number of gaming tables allocated so far, the analyst believes that the maximum number of gaming tables have already been allocated, meaning properties opening over the next few months could be at a severe disadvantage.

“While the government’s official goal is to cap the increase in gaming tables at three per cent per year, the official numbers suggest that current gaming table allocations (up to and including Wynn Palace) have already surpassed the government’s guided cap through to end-2017,” said Daiwa in a recent report.

According to the brokerage, the government had already surpassed its three percent mark by 1.1 percentage points at year-end 2015, with 150 table allocations to Galaxy Macau and 200 to Melco Crown.

This year, Galaxy received a further 100 tables, Melco with 50 and Wynn received its first batch of allocated tables at 100. Along with the 25 new tables to be allocated to Wynn in 2017, the government will already be over its incremental mark by 0.3 percentage points for the whole year 2017, said Daiwa.

The Parisian, which is scheduled to open in September, is predicted to receive 100 tables, while further openings, including MGM Cotai is expected to receive a total of 150 tables.

In a response to an enquiry from local media outlet Macau Business Daily, representatives of the Gaming Coordination and Inspection Bureau (DICJ) said it would “strictly adhere to its policy of limiting the number of gaming tables to a three per cent annual compound growth rate for 10 years until 2022.”

“The three per cent is an annual compound growth rate and not a fixed rate,” noted the regulator.

In regards to Wynn Palace’s recent opening, the report from Daiwa noted that the table grant to Wynn Palace was one of the lowest ever granted to a major casino property in Macau, adding “the government appears to have been much more generous in allocating tables to relatively early property openings.”

“Future table grants could exacerbate this inequity among operators. Moreover, the government’s concern of oversupply raises the risk of overall gaming table reductions/rebalancing post-2020-2022, particularly for those operators that today are well positioned in terms of tables relative to peers,” noted the report.