Macau Regulators Playing Cards for Casino License Renewal Close to Vest
Posted on: November 27, 2017, 06:00h.
Last updated on: November 27, 2017, 04:18h.
While casino operators in Macau will need to start reapplying for their gaming licenses in the next few years, they shouldn’t expect any early indications of what the conditions for those renewals will be. That’s the word from Macau Secretary for Economy and Finance Lionel Leong Vai Tac, who says that the competitive nature of the gaming industry means the territory will want to keep its cards close to its vest.
According to GGRAsia, Leong spoke on Thursday in front of Macau’s Legislative Assembly to address the upcoming expiration of concessions granted to the six current casino operators in the Chinese gambling enclave. Those licenses will end on various dates between 2020 and 2022. Leong said that increased competition throughout Asia means that regulators in the market need to be careful about revealing information before it is necessary.
“Before we announce the new rules, we need to think about the appropriate time to do so, in order to guarantee the sustainable development of the [gaming] sector,” Leong said.
Regional Competition Prompts Discretion
The main concern appears to be the potential reaction from other jurisdictions in the region. If Macau were to start announcing their rules now, Leong said, then regulators in other regions might adjust their own policies to increase the competitive pressure on China.
The comments follow statements earlier this month from Macau’s Chief Executive Fernando Chui Sai On, who suggested that the right time to start revealing information to operators looking to extend their licenses would be sometime in mid-2018.
Not surprisingly, current license holders might want information about standards and concessions sooner rather than later. Angela Leong On Kei, an executive director at SJM Holdings, recently urged Macau officials to announce their intentions so that the process could move forward more smoothly for interested parties.
Under the gaming laws of Macau, the government does have the ability to renew the current concession for up to five additional years. However, once these contracts expire, any new concessions can only be granted via public tender.
Macau Casino Regulation 2.0
While there is plenty of excitement over growing gaming revenues in Macau and across Asia, the hottest topic in Macau has been the impending licensing renewals, with both the government and casinos taking steps to prepare for the application process.
For some operators, that means pouring money into the city in order to make their properties as attractive as possible. Just last month, Las Vegas Sands announced plans to spend $1.1 billion to renovate and rebrand the Sands Cotai Central.
On the government’s side of the equation, Macau authorities have said that all aspects of the gaming sector will be re-evaluated before new licensing begins. The government’s goals could potentially include better regulation of junkets, as well as a push to increase mass market and non-gaming revenue generators.