MGM Resorts is launching a lavish multibillion-dollar casino resort in Macau in the latest big bet by foreign gaming companies on the southern Chinese gambling haven.
Continue Reading Below
Las Vegas, Nevada-based MGM Resorts International was opening its $3.4 billion resort's doors, watched over by a colossal statue of MGM's signature gold lion, on Tuesday evening. It's a high-stakes wager on the casino market's future in the former Portuguese colony, where gambling licenses expire in as little as two years.
CEO James Murren said the company was taking a "leap of faith" that the government will extend its license even though officials have revealed little about the process.
The new resort, MGM Cotai, is its second in the tiny Chinese enclave but the first on the Cotai Strip, an Asian version of the Las Vegas Strip that's the epicenter for extravagant new casino expansion projects.
The doors open just in time for the busy weeklong Lunar New Year holiday beginning Friday, when mainland Chinese tourists typically flood the tiny enclave.
The opening was delayed by damage from Typhoon Hato in August, which killed 10 people. Many of the atrium roof's triangular glass panels still had cracks caused by the storm's high winds but casino representatives said they were safe because only the outer of five glass layers was damaged.
Highlights include a $13 million art collection including 28 Qing Dynasty carpets, an orb-shaped Swarovski crystal chandelier and haute couture dresses decorating the lobby. There are also luxury shops, celebrity chefs and theater shows, including one described as a "mind-bending and harmonious technological symphony." The atrium's sides are covered in LED screens showing digital art such as rice paddies at sunset or "green walls" growing endangered plant species
Macau is the world's biggest gambling market and the only place in China where casinos are legal. Licenses for the city's six casino operators are due to start expiring in 2020, with MGM's among the first. The government has released no information about the renewal process, the first since a gambling monopoly ended in 2002, allowing in foreign operators also including Las Vegas Sands and Wynn Resorts.
"I have no answers but I have a lot of trust" that the government will renew MGM's license, Murren said. He said he thinks officials will do so based on the company's track record of adding non-gambling attractions to help meet the government's goal of diversifying the economy.
"Sometimes you have to have a leap of faith," Murren said in an interview. "We feel we are the kind of company that the government would like to see here."
Macau Chief Executive Chui Sai-on has said mid-2018 would be an appropriate time to provide details.
Macau gambling revenues are on the upswing, rising 19 percent last year to $34 billion after several years of declines, as wealthy Chinese gamblers shied away amid an extended corruption campaign by President Xi Jinping. "They since have started coming back to the market as they feel more comfortable with their situation in China," said Grant Govertsen, an analyst at Union Gaming Research.
Chinese high-rollers helped propel Macau's rapid transformation from a seedy backwater into a global gambling powerhouse but the country's communist leaders want to cut its dependence on these so-called VIPs — often corrupt mainland Chinese government officials or executives at state-owned companies. Instead, they want the city to focus more on middle-class Asian tourists.
MGM Cotai debuts with 100 casino tables, including 77 transferred from its older resort. But none yet are for VIPs, whose gambling is arranged by junket operators — the shadowy middlemen who help rich Chinese gamblers get around the country's strict capital controls by lending them money and then collecting debts when they go home.
Murren said he expects up to bring in up to five junket operators by mid-year.