Macau Chief Gaming Regulator Mum on Whether MGM and SJM Will Be Granted License Extensions
Posted on: January 3, 2019, 06:52h.
Last updated on: January 3, 2019, 11:03h.
The head of the Macau Gaming Inspection and Coordination Bureau (DICJ) told local news reporters that he had no update on the odds of whether MGM China and SJM Holdings would be granted two-year license extensions.
DICJ Director Paulo Martins Chan told GGRAsia, a media outlet focused on Asian gaming news, that his agency was in receipt of the two casino operators’ requests to push back their licensing renewals until 2022. That would fall in line with the scheduled expiries of Macau’s four other gaming concession holders – Sands China, Wynn Macau, Galaxy Entertainment, and Melco Resorts.
Regarding this issue, we’ve submitted the technical opinions of the six gaming concessions to our superiors. But we do not have any news to tell yet,” Chan told GGRAsia.
SJM Holdings, the casino empire of Macau’s so-called “Founding Father” Stanley Ho, and MGM, will both see their licenses expire in March 2020 unless enclave regulators grant an extension. The companies argue that all six licenses should undergo the renewal process at the same time to create a level playing field.
Uncertain Regulatory Environment
Macau’s six licensed casino operators are coming off their best year since 2014. Gross gambling revenue (GGR) totaled $37.5 billion, a 14 percent increase on 2017.
December crushed analyst expectations, as enclave casinos surged nearly 17 percent while forecasts called for just moderate single-digit growth. Despite the good fortunes, there is plenty of unease across the world’s richest gambling hub as 2019 gets underway.
The DICJ and Macau government say they’re reviewing every aspect of the enclave’s gaming industry to “perfect the laws and regulations.” But a little more than a year until MGM and SJM are expected to see their operating permits expire, and specifics as to what changes might be coming have been scant.
SJM and MGM have billions of dollars invested in their Macau and Cotai Strip properties. SJM is set to open its $4.6 billion Grand Lisboa Palace later this year.
“With so much having been invested in the Grand Lisboa Palace project, we have to be able to answer our shareholders regarding how the business will continue to operate in the future,” SJM CEO Ambrose So Shu Fai said last year.
Tricks of the Trade War
Along with uncertainty over Macau’s future gaming regulatory environment and the forthcoming licensing renewal process, the ongoing trade war between the United States and China poses additional threats.
Last month, gaming analyst Steve Vickers said MGM, Sands, and Wynn could be sitting on “a geopolitical fault line.”
Vickers expressed concerns that People’s Republic President Xi Jinping could target the three US casino operators to gain an upper hand his negotiations with President Donald Trump. Sands and Wynn make the majority of their revenue in China, and both companies have long ties to Trump.
Sheldon Adelson, the billionaire founder and CEO of Sands, was the Republican Party’s largest donor during the 2016 election. And ousted billionaire Steve Wynn recently served as the finance chair of the Republican National Party.
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