A 10-year gaming license extension, penned in December 2022, has paved the way for MGM China Holdings Ltd, largely owned by MGM Resorts International, to make an investment of $1.9 billion in their two casino resorts in Macau. The catch? The substantial amount has to be funneled into non-gaming related undertakings by 2032.
MGM China is known to operate the integrated resorts – MGM Cotai and MGM Macau – situated in China’s casino paradise, Macau. Amidst the glitzy meetings between gamblers and fortunes on the Cotai Strip – Asia’s own version of Las Vegas – the two MGM properties stand as prolific witnesses. Earning its moniker from the multitude of show-stopping casino resorts, Cotai Strip is all set to see a wellness reformation underway.
It was the Macau Special Administrative Region (SAR) Government that sealed the deal with MGM China for this major investment. Lights are now being shone on the company’s agenda to allocate the hefty budget into wellness amenities and additional hotel rooms, boosting the luxury quotient of the already opulent resorts.
The first phase of the plan involves the construction and inauguration of an art museum and a wellness center at MGM Macau. This unique tandem of art and wellness is set to blossom in the historic downtown area of the city, situated on the peninsula. The whispers are getting louder around the company’s intentions to replicate the successful wellness model at MGM Cotai, bringing in a noticeable whiff of spas and health treatment services.
At MGM Macau, the room count stands at about 600, while MGM Cotai boasts of approximately 1,400 occupancies. A total of 2,000 rooms makes MGM the smallest hotel player among the enclave’s six licensed casino operators. By contrast, Sands China Ltd, the Chinese subsidiary of Las Vegas Sands, possesses the crown for the most casino hotel rooms with nearly 12,400.
MGM’s possible strategy of amplifying room numbers seems to be a wise wager. Macau has been witnessing a sharp downturn in the influx of VIP high rollers and must lure more general leisure travelers. Consequently, the SAR, acting on Beijing’s orders, ousted the majority of the junket operators amidst the pandemic.
For years, Macau casino high-roller rooms thrived thanks to junkets, but China President Xi Jinping grew increasingly apprehensive about the massive money outflow from the mainland via Macau. Aligning itself to the communist regime’s high tax structure, SAR turned out to be a tax haven given its advantageous personal tax structure.
With high-rolling taking a backseat, the focus is now shifting towards the premium mass market. MGM seems to be aligning with the industry’s pivot towards the general public capable of spending thousands of dollars a day, whether on gaming or other resort luxuries.
Sheldon Adelson, the now-deceased founder of Sands, is widely acknowledged for his role in pioneering the concept of an integrated resort casino. These resorts typically consist of a casino, hotel, convention facilities, entertainment venues, luxury retail shopping, and fine dining.
Incorporating wellness offerings into integrated resorts is gaining traction in the industry. Sands announced last year that its proposed Long Island destination would feature a Canyon Ranch if it managed to secure one of the three gaming concessions in downstate New York. This underlines a rising trend of integrating well-rounded wellness packages into resort casinos, catering to both the body and the spirit of their guests.
