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China – Galaxy Macau could prosper from unused gaming tables

By - 11 April 2018

Analytical group Union Gaming believes that Macau operator Galaxy Macau is best placed to benefit from a surplus of gaming tables following the opening of Grand Lisboa Palace next year which completes the current wave of Cotai-based openings.

In a report entitled ‘Macau pipeline in pictures,’ Union Gaming predicts that Macau’s gaming regulator will have a spare 482 gaming tables unallocated.

It introduced the gaming table cap in 2012 with a three percent annual growth rate fixed until 2022.

With there being 5,500 tables in the market at the time of the cap, the growth rate would allow for 1,892 new tables to be issued through 2022. Once SJM opens Grand Lisboa Palace with 125 tables in February. Union Gaming believes that MGM and SJM will be awarded another 75 tables combined as part of a ‘catch-up’ provision by 2020 meaning the government will still have 482 tables yet to allocate.

Union Gaming’s Grant Govertson said: “Under the assumption that SJM also gets an initial batch of 100 tables for Grand Lisboa Palace in 2019, and that the government allocates ‘catch-up’ tables to MGM and SJM after the license situation is finalized, this would leave 482 tables in the government’s inventory.”

Union Gaming believes that Galaxy Entertainment Group, which is due to open Phase 3 and Phase 4 of Galaxy Macau from late 2019 is best placed to get the tables. An extra 4,500 hotel rooms will be added along with a bigger gaming floor,
“In a nutshell, Galaxy is under-supplied in terms of room count and the addition of more room product will be a material driver of earnings for the company over the medium and longer terms,” Mr. Govertsen said. “The fact that Galaxy has so much developable land is one of the reasons we remain bullish on shares.”

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