MGM China announced that they accepted a Land Concession Contract from the Macau government. The stock is bid up 6% on this news. We don’t think people fully understand the process of developing a new casino property in Macau. MGM Cotai still needs to be formally Gazetted and then obtain a construction permit before the 3 year construction timeline can even begin.
Here is the timeline for Wynn Cotai:
Land Concession Contract: Sept 12, 2011
Formal Gazette approval: May 2, 2012
Building Permit: ?????
Wynn Cotai hasn’t even gotten its construction permit yet. If this same timeline holds for MGM, then we should expect Gazetting in 8 months and who knows when for the building permit. Thus, it should be at least a year and more likely two before construction can even begin and 4-5 years before the property would open. Our original expectation on the timing of the MGM Cotai opening was 2017-2018 so today’s announcement doesn’t change that.
We would fade this news.