A recent report from Morgan Stanley estimates that the number of live table games in Macau has risen 5 percent through the first nine months of the year, which appears to suggest that flexibility is possible in the government’s stated cap on new table supply of 3 percent a year.
The report doesn’t explain the increase, but it has prompted speculation by English-language Macau Business Daily that the cap is not as rigid as it looks on paper.
The allocation of live tables, the market’s dominant growth engine, is supposed to be calculated on a compound annual basis of 3 percent starting from the fourth quarter of 2012, when there were about 5,500 tables marketwide, and continue through 2022 when the last of the territory’s six casino concessions is slated to renew.
The newspaper speculates that one reason for the 2 percent difference implied by Morgan Stanley is that “the number of tables in the possession of an operator could be greater or fewer than the number of tables recorded as its official ‘allocation.’
“Additionally, the number of tables any observer can physically count on the floor isn’t necessarily what the operator actually possesses. Some could be in storage or being used for training,” the paper said.
It’s also known that operators are shifting tables among properties to maximize yield in an environment in which current demand far exceeds current supply.
The paper also suggests the possibility the government will be flexible in how it defines the cap.
