MGM China renews branding agreement with MGM Resorts International

MGM China Holdings has entered into a second renewed branding agreement to continue using the MGM brands.

Macau.- Shortly after announcing the extension of its casino licence until December 31, MGM China has announced that it has extended its branding agreement with MGM Resorts International. The agreement was due to expire with the casino licence on June 26.

Under the agreement, MGM China will pay MGM Branding a monthly royalty based on 1.75 per cent of the company’s consolidated monthly revenue. This is in exchange for MGM China’s use of certain trademarks owned by MGM Resorts International and its affiliates.

The licence fees shall be paid on or before the 15th day of each proceeding month. The original brand agreement between MGM China and MGM Brands came into effect in June 2011 and expired in March 2020. In 2019, it was extended until June 26, 2022, and will now be in place until December 31, 2022.

The new agreement places monetary caps on royalties payable at the MGM Macau and MGM Cotai properties operated by MGM China. 

During the first quarter of the year, MGM China reported HKD2.09bn in revenue. The figure was down 8.9 per cent when compared to last year and down 14.6 per cent quarter-on-quarter. The company noted that financial results were affected by entry restrictions in Macau due to the Covid-19 pandemic.  

As Macau’s new gaming law has been approved, it is expected casinos will receive new direct licences by the end of the year. The new legislation allows up to six gaming concessions with a length of 10 years.