loomberg, citing anonymous sources as the information had not been made public yet, reported earlier this week that the Suncity Group and Tak Chun Group were in discussions to promote gaming at the $3.2 billion resort. The article spoke of three rooms opening as soon as this business quarter. On Wednesday, GGRAsia was able to confirm that Suncity will be opening a VIP club, but details were scarce, “At this particular moment, we can only confirm that Suncity Group is going to operate a VIP club in Macau’s Studio City,” a company spokesperson told the news outlet.
As of news time today no application for the VIP rooms has been announced by the Gaming Inspection and Coordination Bureau (DICJ).
Melco Crown opened Studio City to the public in October 2015, a year that saw net income for the company drop 83 percent. The company had told investors that it needed 400 new gaming tables at the property. The government held off until the last moment and finally allocated 250 tables, 200 upon opening and 50 more in January. None were designated for junket operations or other high stakes play when the casino opened.
In May this year Melco Crown announced earnings that missed analyst’s estimates and James Packer’s Crown Resorts Ltd. reduced its stake in the joint venture with Lawrence Ho by US$800 million. About a month later Crown filed plans with the Australian Securities Exchange to separate its domestic and overseas businesses, which include Studio City, City of Dreams Macau, and City of Dreams Manila.
The poor performance of the VIP gaming sector has been largely responsible for a 25 month string of declining gross gaming revenue in the special administrative district in the midst of nearly 40 months of pressure from Beijing to stop the flight of capital from the mainland while cracking down on graft and corruption throughout the Chinese government, as well as trying to stem lavish spending.
When Studio City opened without VIP gaming, it was announced as a business decision, and was in line with the government’s desire to offer a more family-friendly and culture-centric tourism experience in Macau. However the trend of VIP gaming to dominate the percentage of total gaming revenue has been on a decline since 2010, when competitor Galaxy Entertainment Group saw an industry high of 91.6 percent of all gaming revenue come from high rollers. That number had been reduced to 61.5 percent for GEG by the end of 2015. By the end of 2015 even Wynn Macau had flipped the picture and for the first time since 2010 were offering more mass gaming tables than VIP – falling from a high of 295/195 at the end of 2011, to 190/246 ending 2015.
The Secretary for Economy and Finance released numbers this week for the first half of the year showing that VIP revenue was down 17.3 percent from Q1 2015, while mass market gaming revenues were only down 3.6 percent.