Macau officials announced on Friday that casino licenses in the Chinese enclave will be limited to six, while their duration will be halved. The decision comes as the six current licensees in the world’s largest gambling hub approach the expiration of their permits, set to cease in June. A bill introducing these changes is now to be sent to the local legislature, where it is expected to pass.
The government said the number of casino operators will thus continue to be limited to six, but their operating period will now be set at 10 years instead of 20, according to Reuters. A casino executive familiar with the legislation told the news agency that the government decided not to go forward with a plan to directly supervise the casinos after feedback from the operators.
The plan to introduce government representatives in the board of operators was formerly suggested by officials, alleging it would help the government “to monitor and approve” companies and ensure that they operate legally, while preventing them from violating regulations. Operators showed heavy concern regarding this possibility.
The new announcement helps bring clarity to Macau’s gaming industry and puts an end to speculation, which grew among operators and analysts. Authorities in the region have tightened scrutiny of the sector as of late, including officials clamping down on the junket business amid concerns of money laundering and illicit capital flows from mainland China.
The newly-announced license conditions took into account input from a consultation period launched in September 2021, aimed at reviewing and changing rules for the casino market. Respondents showed support for plans to keep the number of operators allowed in the market at the current total of six, while halving the duration of the licenses.
“A large number of bids hinders the diversified development of the industry and may lead to unhealthy competition in the gaming market and increase the difficulty and administrative cost of the government’s supervision of the industry,” the Macau government said earlier this year. “If the number of grants is too small, it will weaken Macau’s international competitiveness.”
Officials announced all existing or potential operators in the enclave will need to apply through a new tender process, although no details were offered on when operators will have to bid or whether the current license term will be extended, further informs Reuters.
Moreover, casino operators will now have to increase the amount of capital to 5 billion patacas ($623.67 million) from 200 million patacas, and increase the requirement for a Macau-based director of the company to hold 15% from 10%. These two proposals were also introduced during the consultation period and gathered support from respondents.
Overall, the new law was found overall agreeable: operators feared some of the most unpopular proposals, such as the appointment of government representatives, could have been included in the legislation. Moreover, the government announced no current plans to increase the level of taxes on the industry, and current licenses will stay in place until the new law is implemented.
Current licensees in Macau include Wynn Macau, Sands China, MGM China, SJM Holdings, Galaxy Entertainment and Melco Resorts. Their licenses are due to expire in June this year, but Beijing has not yet announced how the rebidding process will be judged. According to a report by Bloomberg, the 10-year terms for casino licenses can be stretched “by another three years.”
While the news source claims the new gaming legislation brings some relief to the industry, as investors experienced anxiety over the possibility of operators being pushed out, it describes a move to cap public floats as a surprise, given it was not included in the original proposal.
The impact of the decision to limit the public float of gambling operators is not yet immediately clear, says Bloomberg: while public floats will be capped at 30%, officials said this would only be for license-holders. Casino operators see their licenses currently held by subsidiaries, and not their listed arms.
Ku Mei Leng, Chief of Macau’s Office of the Secretary for Economy and Finance, defended the public float cap, claiming it is set to “improve supervision” of the gaming industry. He further stated at the briefing that it would not limit market freedom.
Original article: https://www.yogonet.com/international/news/2022/01/14/60945-macau-casino-license-cap-to-remain-at-6–duration-halved-to-10-years-and-local-ownership-risen-to-15-
