Proposal to Change Macau Gaming Law Under Review According to Secretary of Economy and Finance Lionel Leong
Posted on: July 24, 2018, 04:00h.
Last updated on: July 24, 2018, 01:58h.
Macau Secretary for Economy and Finance Lionel Leong announced this week that a proposal to set the future regulatory conditions of the enclave’s massive casino industry has been received by the government and is currently under review.
In less than two years, two of the six casino licenses in the world’s richest gambling hub are scheduled to expire. Macau gross gambling revenue totaled $33.2 billion in 2017, and is on pace to hit nearly $40 billion this year.
We are now having an internal study on the preliminary proposal,” Leong told reporters in Macau over the weekend. “We’ve said before that the awarding of the gaming concession contracts will have to be done via a bidding process, and the related law needs to be amended as well.”
SJM Holdings, the gambling empire of billionaire Stanley Ho who held a monopoly on casinos in Macau for decades, and MGM Resorts, will both see their concessions terminate in 2020. The remaining four operators, the Chinese subsidiaries of Las Vegas Sands and Wynn Resorts, and Hong Kong companies Melco Resorts and Galaxy Entertainment, will see their permits expire in 2022.
SJM and MGM want answers sooner rather than later on how the process will work. To date, no specific details have emerged.
Reapply, Not Renew
SJM Holdings CEO Ambrose So Shu Fai has petitioned the Macau government to extend it and MGM’s permits by two years to allow all six operators to undergo the process “at the same pace.”
Macau law allows the government to extend casino licenses up to five years. However, once they terminate, companies must reapply for new concessions. Leong explained referring to it as a renewal is incorrect.
Several gaming analysts expect the Macau government to extend SJM and MGM’s licenses until 2022. So said with his company investing $4.6 billion to open its first integrated casino resort on the Cotai Strip, shareholders need reassurance from the Special Administrative Region that the business will be permitted to operate there in the coming years.
Odds on Changes
Macau Chief Executive Fernando Chui said every aspect of the casino industry would be reviewed ahead of 2020. The goal, according to the enclave’s top official, is to “perfect laws and regulations governing the gaming industry.”
The Macau University was tasked with conducting the analysis of the casino industry through its Study of Commercial Gambling Institute. Leong did not reveal if the proposed changes being considered came from the university’s findings.
He did say, however, that the government was listening “to social opinions” on gambling from the general public.
Market observers believe the government is seeking better controls to audit junket groups, the travel agencies that bring high rollers from the mainland and lend them money to gamble with in the enclave. Chinese President Xi Jinping included such businesses in his anti-corruption campaign in 2014, which led to GGR plummeting from $45 billion in 2013 to less than $28 billion in 2016.
There’s also rumors that Macau will add a seventh casino license.
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