The MGM Grand, Macau, is one of the many casinos and resorts that come under MGM Resorts International. The hotel cum resort opened its doors in Macau in 2007. The Grand stands as a 35-story structure with 600 rooms. The casino houses more than 1000 slot machines and as many as 427 gaming tables. Like all its casinos, the golden lion stands in front of the casino welcoming the guests to the MGM experience. The resort was opened in Macau as a joint venture with Chinese casino magnate Stanley Ho’s daughter Pansy. The joint venture started as a 50–50 deal.
In 2011 the 50–50 venture changed. MGM Resorts International was finally getting controlling interest in the Macau venture. This is on account of a new deal with Pansy. The new deal would give MGM 51 percentage, which is controlling interest in the casino. Pansy would get 29 percent and the remaining would be offered as public offering. The proceedings from the public offering would go to Ho’s ventures. Miss Ho would also receive $300 million worth of MGM’s senior convertible notes. Controlling interest in a casino in the gambling capital of the world is the target. This they have been able to achieve with this new deal with Pansy Ho. With the deal, MGM also aims to lead in the Macau gambling industry where other casino giants like Wynn and Las Vegas Sands are already leading the show.
The IPO is worth $1.5 billion. The fact that MGM is passing on that fortune to Pansy Ho comes as a surprise to many economists and financial experts. Though MGM would not gain from the IPO, the leaders of MGM state that the deal would only bring it benefit in the long run. In Macau casino revenues are skyrocketing every year. In the year 2010 alone, there was a rise in total gambling revenues that were somewhere near 45 percent. Therefore, the move by MGM to make a sacrifice in light of the bigger gains that await it is justified. There are also criticisms regarding Pansy’s decision to give up controlling interest in the venture. Some even criticize MGM of taking undue advantage of the lack of business expertise of Pansy. The company still claims that no such intent was there and the deal was struck after many days of negotiations with Pansy and her managers.
MGM further aims to strengthen its foothold in Macau by gaining land rights in Macau’s Cotai area. Here they plan to build a new casino. Other casinos like Galaxy and Wynn are set to open shop there. The Cotai area of Macau is the presently booming center where most gambling kings are looking on with interest.
MGM Resorts International is now more focused on its Macau operations. Las Vegas is diminishing in its capacity as a gambling destination. Macau has now emerged as the leader when it comes to gambling. More tourists and gamers prefer the grander settings of the Macau casinos to that of Las Vegas. As such, MGM’s strategy to build up the business in Macau is justified.