- Legal States
Erik Gibbs June 9, 2021 3 min read
MGM Resorts-backed Venture to Launch the MGM Name in China
The Diaoyutai State Guesthouse in China has played host to foreign dignitaries like Vladimir Putin, Kim Jong-un, Theresa May, Richard Nixon and others since it opened in the 1950s. It is also the former home of China’s Cultural Revolution, which lasted from 1966 to 1976. While that cultural revolution had a completely different goal in mind, the Diaoyutai is now going to be involved in a potentially different type of cultural revolution. The operating group of the property has teamed up with MGM Resorts International to bring the US casino operator’s brand to China.
MGM Resorts Steps Into China
There has been talk for a while that MGM had plans to take an increased position in the Asian market, although establishing properties in China may not have been the first reaction by most to the news. It makes sense – after all, MGM’s Asian arm is called MGM China. The new arrangement will give MGM more access to China and its decision-makers down the road.
Diaoyutai MGM Hospitality Ltd is a joint venture created by MGM and the Diaoyutai to introduce MGM-branded venues to China. According to GGRAsia, the properties, at least initially, will be located in the Guangdong province, which is an important feeder market for Macau. There will reportedly be one property in Zhuhai, the mainland city that sits closest to Macau, as well as three in Zhenzhen, across the border from Hong Kong. None of the properties, in accordance with Chinese law, will be able to offer casinos.
GGRAsia was told in an email from Diaoyutai MGM Hospitality that two of the properties will be introduced in 2023. These will be the “MGM Shenzhen” and “Mhub by MGM Shenzhen Nan’ao.” Next, it plans on opening a “Diaoyutai Boutique Hotel Shenzhen” in 2024, followed by a “Mirage by MGM Zhuhai” two years later. The Mirage, which is reportedly being developed to cater to the Chinese market specifically, will be a hotel located in Zhuhai’s Jida district.
MGM Shifting Focus Out of the US
MGM may have its roots in the US, but isn’t dead set on putting all of its energy and resources into the domestic market. It has a strong and stable Asian market that it expects to grow and is now the only company in the running for an integrated resort in Osaka, Japan. As the gaming industry moves into a post-COVID-19 atmosphere and begins to recover, MGM will now focus on expanding its operations in Asia while adding new territory.
MGM already has a branded hotel in China through its Bellagio Shanghai hotel that opened almost three years ago. However, the rapid expansion it is preparing over the next five years in the country denotes a transition in the company’s direction. Given that China prohibits any form of advertising that targets gambling operations, MGM won’t be able to use the properties to boost its gaming revenue, unless it figures out how to convince China to change its policies. Perhaps that’s one of the reasons it is moving quickly with its in-country expansion.