Macau to sign licensing agreements with the 6 winning casino operators on Friday, source says

The city’s six incumbent casino operators were awarded licences that run from January 1, 2023 to December 31, 2033
The six operators are likely to invest a total of HK$100 billion (US$12.8 billion) over the next 10 years on non-gaming elements, according to a Credit Suisse note

Macau

Salina Li

Published: 6:29pm, 14 Dec 2022

Why you can trust SCMP

Macau’s government will sign contracts with the six winning casino concessionaires on Friday, according to a source.

Last month, MGM Grand Paradise, Galaxy Casino, Venetian Macau, Melco Resorts Macau, Wynn Resorts Macau and SJM Resorts were awarded 10-year licences that run from January 1, 2023 to December 31, 2033.

The announcement wrapped up a year-long jostling for the rights to operate gambling halls in the only place on Chinese soil where casinos are legal. The bidding process, which kicked off in July after the largest overhaul of Macau’s gambling laws in decades, saw a surprise in September when Malaysia’s gambling tycoon Lim Kok Thay unexpectedly threw his hat into the ring, becoming the seventh bidder for the six licences.

The top executives of each of the six concessionaires will attend a press conference scheduled for Saturday, where further details about their respective investment plans for the next 10 years could be disclosed, said the source close to a winning casino operator.

Visitors try their luck on slot machines at a casino in Macau. Photo: AFP

The casino operators did not reply to requests for comment from the Post.

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, which put MGM China on top and Genting Group at the bottom.

The six concessionaires will need to focus on non-gaming elements, which can include sports, art and 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 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 licences in late November, the shares of the gaming firms have risen 46 per cent, the research note said.

Meanwhile, Macau’s casinos are on track to post their lowest revenue on record this year. Last month, revenue fell 56 per cent year on year to 3 billion patacas (US$374 million) as mainland China’s strict Covid-19 policies kept visitors away from the gaming hub. With gaming revenue for the first 11 months of the year touching 38.7 billion patacas, it is likely to fall short of the previous all-time low of 60.40 billion patacas in 2020.

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 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.

Post