Thursday, January 10, 2013

MGM China gets official OK for 2nd Macau casino

FILE - In this Dec. 18, 2007 file photo, visitors queue up for entry of the new MGM Grand Macau casino resort after the opening ceremony in Macau. The Chinese arm of U.S. casino company MGM Resorts International won official approval for its new casino-resort in the world?s most lucrative gambling market, Macau. Notice of MGM China?s plan to build a US$2.5 billion resort in the Cotai district was published Wednesday, Jan. 9, 2013 in Macau?s official government gazette. (AP Photo/Vincent Yu, File)

FILE - In this Dec. 18, 2007 file photo, visitors queue up for entry of the new MGM Grand Macau casino resort after the opening ceremony in Macau. The Chinese arm of U.S. casino company MGM Resorts International won official approval for its new casino-resort in the world?s most lucrative gambling market, Macau. Notice of MGM China?s plan to build a US$2.5 billion resort in the Cotai district was published Wednesday, Jan. 9, 2013 in Macau?s official government gazette. (AP Photo/Vincent Yu, File)

FILE - In this Dec. 18, 2007 file photo, visitors queue up for entry of the new MGM Grand Macau casino resort after the opening ceremony in Macau. The Chinese arm of U.S. casino company MGM Resorts International won official approval for its new casino-resort in the world?s most lucrative gambling market, Macau. Notice of MGM China?s plan to build a US$2.5 billion resort in the Cotai district was published Wednesday, Jan. 9, 2013 in Macau?s official government gazette. (AP Photo/Vincent Yu, File)

(AP) ? The Chinese arm of U.S. casino company MGM Resorts International won official approval Wednesday for its new Macau casino-resort, putting it a step closer to catching up with rivals in the world's most lucrative gambling market.

Notice of MGM China's plan to build a $2.5 billion resort in the Cotai district was published Wednesday in Macau's official government gazette.

The announcement means the Las Vegas-based company has cleared another hurdle as it races to build a second casino to compete with competitors that have a bigger presence in the Asian gambling hub. The company said in November that it had received a long-awaited land concession for the project, which will involve a five-star, 1,600-room hotel with 500 gambling tables and 2,500 slot machines.

Macau, a semiautonomous region of China, has become an increasingly important source of profit for foreign operators such as Las Vegas Sands Corp. and Wynn Resorts Ltd. Revenues from former Portuguese colony's three dozen casinos, which have been powered by visitors from mainland China, are about six times the amount earned on the Las Vegas Strip.

Revenues rose 14 percent to $38 billion last year. But the growth rate was down from 42 percent in 2011, making it all the more important for casino operators to expand their presence quickly to capture greater market share. MGM has a relatively small presence in Macau compared with the likes of Sands, which has four casinos.

The approval is "a very important milestone in the project's development timeline and likely came sooner (perhaps significantly sooner) than investor expectations," Grant Govertsen of Union Gaming Research wrote in a note to clients. He estimated the MGM's project would open by mid-2016.

Macau's five other casino operators are also planning new projects or expanding existing ones on the Cotai Strip, a stretch of reclaimed swampland that is modeled on the Las Vegas Strip.

MGM China is a joint venture between MGM Resorts and Pansy Ho, daughter of Macau casino kingpin Stanley Ho, who held a monopoly on running casinos until the government ended it in 2002.

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Online:

Macau gazette (in Portuguese): http://bo.io.gov.mo/bo/ii/2013/02/despstop.asp(hash)62

Follow Kelvin Chan at twitter.com/chanman

Associated Press

Source: http://hosted2.ap.org/APDEFAULT/f70471f764144b2fab526d39972d37b3/Article_2013-01-09-AS-MGM-China-Macau/id-543c3288ac82498e94443ab1737008d3

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