New licenses effective January

Macau Gov. to sign new gaming concessions with all six chosen casino operators on Friday

2022-12-14
Reading time 2:06 min

According to local news, Macau's government will sign contracts with the six winning casino concessionaires on Friday, which include Sands ChinaWynn MacauGalaxy EntertainmentMGM ChinaMelco Resorts, and SJM Holdings. Just last month, the government awarded the six casino operators 10-year licenses that run from January 1, 2023, to December 31, 2033.

The top executives of each of the six concessionaires are expected to attend a press conference scheduled for Saturday, where further details about their respective investment plans for the next 10 years could be disclosed, as reported by South China Morning Post.

The new concessions were provisionally granted to the six current operators on November 26, and will now be awarded on a definite basis. The new contracts will be signed during the afternoon, at the Government Headquarters. The companies awarded licenses are the same ones that currently operate in the hub: newcomer Genting Malaysia-linked bidder GMM Limited failed to secure a gaming concession. 

The casinos were selected based on a scoring system. While the nature of the evaluation was not released, analysts pointed to stable employment, global exposure, and non-gaming commitment as deciding factors. The six concessionaires will need to focus on non-gaming elements going forward, which can include sports, art, cultural events, and health and community tourism.

"The amount of committed investment is the key unknown to the market," Credit Suisse said in a research note on Wednesday. "More clarity on that would be a positive catalyst for the stocks." Credit Suisse said it expected the operators to invest a total of HK$100 billion (US$12.8 billion) over the next 10 years, with bigger players like Sands China and Galaxy Casino likely to account for around HK$20 billion each. 

The research note further added that the ongoing Covid relaxation measures by China should support the share prices of casino operators in the near term. Since the grant of provisional licenses in late November, the shares of the gaming firms have risen 46%, according to the research note.

However, Macau casinos are on track for their weakest revenue total on record as mainland China's strict Covid-19 policies and travel restrictions continue to keep gamblers away from the city. The Gaming Inspection and Coordination Bureau said Thursday that casino revenue in November dropped to 3 billion patacas ($374 million), a 56% year-on-year fall.

Revenue for January-November amounts to 38.7 billion patacas ($4.8 billion), far short of the 270 billion patacas for the same period in 2019, prior to the pandemic. The previous low was 60.40 billion patacas in 2020, when severe restrictions were imposed on gamblers entering the gambling hub.

The prospects for Macau’s casino operators should improve after the city’s government said it would allow Covid-19 patients to isolate at home from Wednesday, joining the mainland and Hong Kong in easing restrictions.

This follows the easing of quarantine rules for overseas arrivals and the ending of routine testing of visitors from China last week. Visitors from abroad now have to undergo five days of hotel quarantine and another three days of home isolation.
Leave your comment
Subscribe to our newsletter
Enter your email to receive the latest news
By entering your email address, you agree to Yogonet's Condiciones de uso and Privacy Policies. You understand Yogonet may use your address to send updates and marketing emails. Use the Unsubscribe link in those emails to opt out at any time.
Unsubscribe
EVENTS CALENDAR