MGM China would invest in the field of “Big Health” – specifically health management, medical care, Chinese medicine, and services related to cosmetology and spa – should the city’s gaming revenues reach the threshold to force a mandatory increase in non-gaming investments, according to the company’s Chairperson and Executive Director, Pansy Ho.
Under Macau’s 10-year gaming concessions, signed last December, concessionaires will be required to increase their non-gaming investment commitments by 20% in the following year should GGR for the year reach MOP$180 billion (US$22.3 billion). With the easing of border restrictions in January, GGR is currently on track to comfortably exceed that figure.
Speaking at an event at MGM Cotai on Tuesday, Ms Ho revealed that MGM China would build out new MICE and art space at its two Macau resorts but that the additional 100,000 square-feet of space it plans to build in Cotai would also be enough for any additional non-gaming requirements.
In such an instance, “MGM will favor the ‘big health’ side, and we always do research in that area,” she said.
Big Health is one of four diversified development projects identified by the Macau government as areas of focus, the other three being high-tech, modern finance, and MICE, culture and sports.
Asked if such an increase in non-gaming investments would put pressure on MGM’s finances, Ms Ho replied, “We have been in contact with the syndicate of banks and generally speaking, it is not a big problem.
“MGM is now in a profitable position and is well capitalized, so there is no problem in making non-gaming investments.
“We have already explained to the Government how we would invest during last year’s gaming license tender, and there is a format to explain investment matters. The six concessionaires now know how much money they have to invest in the non-gaming elements.”
Ms Ho was also asked about the change in Macau’s market dynamics, with the company revealing during its recent 2Q23 results announcement that around 80% of its gaming revenues came from the mass market segment. On the decline of the junket industry, she said, “We will definitely internalize VIP gaming gradually [to a direct VIP model] and increase our international exposure.
“Our advantage lies in the relationship between us and MGM [Resorts] in the USA, as we have agents in different markets around the world, so we can develop our international customer base more quickly.
“Data from the first half of this year shows that the number of international guests is quite good.”
