Macau’s government has signed contracts with the six winning casino concessionaires to renew their casino licenses for the next ten years. The six licenses, effective from January 1 until the end of 2033, are held by Macau’s ‘big six’, including Sands China, Wynn Macau, Galaxy Entertainment, MGM China, Melco Resorts, and SJM Holdings.
On Friday, Chief Executive Ho Iat-Seng, Secretary for Administration and Justice Andre Cheong, and Secretary for Economy and Finance Lei Wai Nong signed the concession agreements for the territory’s government, as reported by Macau Daily News.
The long-anticipated signing concludes a year-long jostling for the rights to operate gambling halls in the only place on Chinese land where casinos are legal. The latest news coincides with the relaxation of Covid-19 rules that have brought the territory’s industry to its knees since 2020 and left a tax hole in Macau’s finances.
The top executives of each of the six concessionaires are expected to attend a press conference scheduled for Saturday, where they will present their investment and expenditure plans for the next ten years. High up on their priorities will be ideas to maintain jobs, promote tourism, and enhance entertainment and conferences to help the city diversify its economy from gambling, according to the requirements of their tender.
The operators are expected to focus on non-gaming activities in the new term, particularly as Beijing is keen for Macau to diversify away from gambling and attract foreign tourists. A broader crackdown by Beijing on capital outflows from the mainland in recent years, including arresting well-known gambling executives in the former Portuguese colony, has also decimated the once dominant and lucrative VIP sector.
Andre Cheong, Secretary for Administration and Justice.
“Each company will need to submit, at the end of September each year, their non-gaming investment, development, and implementation plans for the following year to relevant government departments for approval and follow-up,” Cheong said at the press conference.
“We hope that the development of exhibition centers, performances, sports competitions, and other non-gaming activities can attract more tourists to Macau from different destinations and stay for longer intervals than before. This will generate strong economic benefits for the whole of Macau,” he added.
Previous attempts by Macau to diversify have been unsuccessful, with casino operators shying away from investing in non-gaming due to the high costs, particularly as the gambling industry was far more lucrative, reports Reuters. But Macau’s government laid out conditions in the bidding that are expected to work this time around.
As reported, the casino operators will pour 118.8 billion patacas (US$14.8 billion) between them into Macau under their contractual obligations. Venetian Macao will invest the most with 30.24 billion patacas ($3.7 billion), while Melco the least at 11.8 billion patacas($1.4 million).
Hours before signing the concessions, Macau’s government scrapped quarantines for all inbound travelers, requiring them to undergo daily antigen tests during a five-day home isolation period, effective Saturday. The “0+5” scheme will mean visitors’ health code will be red upon entry to Macau for three days, yellow for two days, and green thereafter.
“The lifting of some of Macau’s more onerous zero-Covid restrictions holds out some hope for the new concessionaires that next year will be better than this one,” said Ben Lee, managing partner at IGamiX Management & Consulting in Macau.
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.
Tourism will be allowed to return to Macau in phases, starting with Guangdong, Shanghai, Zhejiang, Jiangsu, and Fujian. These groups represented about 57% of Macau’s 2019 tourist arrivals from mainland China.
“Assuming that the first group tour visas will resume after March 2023, gross gaming revenue (GGR) could start recovering from the second quarter next year onwards,” said George Choi, director and head of global gaming research at Citi Research, adding that second-quarter GGR could rise by 165% next year to 22.5 billion patacas.
Some 11 satellite operating casinos will have their licenses renewed, down from 18 currently, said Cheong. “If the Covid-19 situation comes within our control, we believe it will not be too long before the current measures are further relaxed,” the Secretary for Social Affairs and Culture Ao Ieong U said at the press conference according to the above-mentioned media.
Original article: https://www.yogonet.com/international/news/2022/12/16/65433-macau-government-signs-gaming-concession-renewals-with-all-six-operators-for-ten-years
