As one of the biggest gambling cities in the world, Macau’s operators have always been in competition with one another. Despite the events of last year, it appears that the competition remains as fierce as it always was. SJM Holdings is the proud owner of the Grand Lisboa Palace, estimated to be worth around $5 million, situated on Macau’s Cotai Strip. This venue is SJM's first integrated resort and casino and executives have shared their new hopes to open the Grand Lisboa Palace’s doors before July arrives.
Earlier this month, SJM held its first-quarter earnings call. Executives used this opportunity to share the progress that has been made on the company’s first integrated casino and resort property. According to the information shared during the call, executives are waiting for its table game allocation from Macau’s Gaming Inspection and Coordination Bureau. SJM also shared that it is aiming high and would like to have around 300 table games and over 1000 slot gaming machines available when it opens the doors of the Grand Lisboa Palace.
The number of table games requested is significantly higher than the Bureau usually allows for integrated resort venues. The gaming regulator is usually allocated between 150 and 200 table games for large-scale operations. However, the SJM has requested a larger number due to its focus on CIP junkets and the premium segment of the industry.
An industry analyst has shed some more light on the topic. According to the statement, premium operations mass and marketing have all received the go-ahead and the success of the Grand Lisboa Palace will be determined by its ability to perform in that highly competitive segment.
Despite the fact that the late owner of SJM Holdings, Stanley Ho, was referred to as the King of Gambling, SJM’s first property on the strip will be the Grand Lisboa Palace. For many years, Stanley Ho held the monopoly on Macau’s gambling industry, which led to him becoming very wealthy. However, this changed in 1999 when Portugal returned the Macau region to China. It was at this time that another now-deceased billionaire, Sheldon Adelson, entered the country. Andelson added his Las Vegas Sands brand to the existing offers in Macau, resulting in the country’s casino market becoming one of the richest in the world by expanding to Cotai.
The five commercial casinos in Cotai are MGM Resorts, Galaxy Entertainment, Sands, Wynn and Melco resorts. The gambling operators who held licenses in Macau followed Andelson’s lead and set up shop in Cotai. Adelson’s dream was to build China its very own version of the Las Vegas Strip and he ended up doing that and much more. Cotai Strip is now home to 10 integrated resorts casinos and is considered the most popular venue for high rollers in Macau.
Industry experts have shared their concerns regarding SJM’s late entrance to the Strip. According to data, the competition that exists in Cotai is fierce and the products available are all equally attractive. Loyalty programs, marketing skills and service levels are all likely to remain strong at established venues. As such, experts expect that the Grand Lisboa Palace will have a hard time winning market share.
Considering the loss that the company posted during its financial call, many expected SJM holdings to put off the launch. According to the figures shared, the firm has lost around $83 million for the period from January to March. GGR decreased by almost 30% to $310,2 million and net income decreased by 29%, resulting in $317 million.
However, it seems that SJM’s executives are willing to take the risk and pull out all the stops. Company officials appeared to be optimistic regarding the future of the firm and noted that this will hinge heavily on how the Grand Lisboa Palace performs. SJM’s CEO and vice-chairman, Ambrose So Shu Fai, shared that the firm’s results have recently seen an uptick due to the leisure travel to Macau resuming. He concluded by stating the firm is looking forward to gradual improvement within the market for the remainder of this year. It is expected that Q2 and Q3 results will contain figures to support this statement.