Macau, China (4E) – The Macau government has approved the request of MGM Resorts International’s China unit to build a second casino in the world’s biggest gambling center.
The Macau government’s gazette said that the deal will involve the American gambling giant paying a land premium worth 1.29bn patacas ($162mn) and rent of 2.15mn patacas annually for the right to build a five-star hotel and a casino resort.
The announcement pushed MGM China’s stock price up by 6 per cent in the Hong Kong exchange. The company is partly owned by Pansy Ho, the daughter of Macau’s gambling boss Stanley Ho.
MGM joins other Nevada-based gambling firms Wynn Resorts Ltd. and Las Vegas Sands Corp. as among the six casino operators battling to expand their foothold in Macau, which has revenues of roughly six times the earnings of Las Vegas Strip.
The former Portuguese colony, the only place in China where gambling is legal, relies heavily on tourism revenue especially from mainland Chinese visitors who spend millions of dollars each year.
In a statement from MGM released today, the new casino resort will have 1,600 hotel rooms, 2,500 slot machines and 500 gaming tables. The $2.5bn project is expected to be completed in 36 months.
The casino will be built in Cotai, a Las Vegas Strip-like area where other casinos are also located. It will be MGM’s first casino development since 2009 when it opened the $9.2bn mega resort, CityCenter, in Las Vegas.