Seven gaming companies have submitted applications for new 10-year concessions in Macau.
The six gambling concessions in Macau have received offers from seven different businesses. The city's six existing operators—Wynn Macau, Sands China, MGM China, SJM Holdings, Galaxy Entertainment, and Melco Resorts—as well as a seventh business, GMM Limited, a member of the Genting Group, are on the list of companies competing for the 10-year licenses.
GMM Limited, a Malaysian company with extensive expertise in its native country's gaming business, submitted a late application on Wednesday, according to local media. According to Macao News, bidders presented their proposals in large boxes to the offices of the Gaming Inspection and Coordination Bureau, with the opening of each request for proposals scheduled for Friday.
Presentations from each firm will be held over the weekend after the 10-year concessions' bidding procedure. In addition to filing bids, gaming businesses had to provide supporting documentation and deposit MOP 10 million ($1.2 million).
The government of Macau began the public bidding process in July, with up to six concessions scheduled to begin operating in January of next year for ten years. The new license holders will not be notified until after weeks of discussions, according to the authorities. The six winners, according to the analysts quoted by Reuters, may be revealed by the end of November or the beginning of December.
The sole legal gambling market in China, the special administrative area, derives a large portion of its annual income from operating casinos. However, in addition to managing their hotels, operators are being urged by Macau officials to draw in foreign tourists, create non-gaming investments, and exhibit corporate social responsibility.
The gambling corporations addressed this desire for greater non-gaming operations in their announcements made after their tenders were submitted. "Our proposal reinforces our commitment to Macau and the further diversification of its economy," Lawrence Ho, Chairman and CEO of Melco, said on Wednesday. "We look forward to playing a leadership role in partnering with the Macau government to execute on the government’s vision."
According to Sands China President and Executive Director Wilfred Wong Ying Wai, "Over the next decade we hope to play a leading effort in helping Macao attract more tourists from more parts of the world and further its efforts to be recognized as a world center of tourism and leisure," said Sands China's President and Executive Director Wilfred Wong Ying Wai. The company’s submission highlights Sands China’s investments in the city."
Except for GMM, there was not much new competition, which was to be expected. The current climate, according to DS Kim, an analyst at JP Morgan in Hong Kong, is difficult for new entrants. Although Macau's gaming sector formerly outperformed that of Las Vegas, the Covid epidemic is still having a negative impact on business due to travel restrictions.
In addition, the concession term has been reduced from 20 to 10 years, which may cause new entrants to worry that they will not have enough time to submit correct returns. This action is a part of a larger reform of Macau's gaming laws that will give authorities more monitoring and control over the city's casino owners.
Other recent measures adopted by the government include a first-time formal table cap and minimum income criteria for new operators, which will take effect at the commencement of their contracts in 2023. Additionally, authorities have tightened down on junket activities, which resulted in the arrest for unlawful gambling of former junket bosses Alvin Chau from Suncity and Levon Chan from Tak Chun.
The period for submitting bids, which ran from July 29 to September 14, occurred during Macau's worst Covid-19 epidemic, which resulted in a 12-day closure of the casinos in July. The gambling establishments have finally reopened, but business is still sluggish because the limitations are just being gradually relaxed.
By fLEXI tEAM