Las Vegas Sands, Wynn Resorts, MGM Resorts named Macao’s gaming concession winners
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Three Las Vegas-based companies got a welcome boost Saturday when the Macao government announced they had been granted provisional approval to continue operating casinos in the Chinese enclave for the next 10 years.
Macao’s special administrative region government announced Saturday that MGM Resorts, Las Vegas Sands, Wynn Resorts along with three Chinese rivals were awarded provisional approvals. The move comes after the companies committed to help diversify tourism in the Chinese enclave by investing in nongaming attractions such as theme parks and music venues.
The government’s announcement was good news for the Las Vegas companies, which over the years have invested billions of dollars in the only location in China where gambling is legal. While the companies have faced strong financial pressures due to the COVID-19 pandemic, there’s hope for Macao’s eventual return to pre-pandemic days of stellar casino revenue performance.
In addition to the Las Vegas-based companies, Galaxy Casinos, Melco Resorts and SJM Resorts — also received the provisional concession licensing. Genting Group of Malaysia, which submitted a late bid for a concession, was left out of the mix.
André Cheong Weng Chon, Macao’s secretary for administration and justice, said that after the announcement of the provisional award list, the government would begin to draft contracts expected to be signed with concessionaires next month.
“The six companies that have been provisionally awarded will be developing the non-gaming and gaming sectors for Macao,” Cheong said. “They have all submitted plans to the government for future investments, but no details can be announced at this stage.
“The government has chosen these six companies in accordance with the law, and the bidding committee, in accordance with the law, focused on the tenderers’ social responsibility plans, and this condition was accepted by the government.”
‘Commitment never wavered’
The Las Vegas companies that submitted bids were all confident of renewal, but the addition of Genting to the list of applicants generated some doubt that one of the existing companies could be ousted.
“Our commitment to Macao has never wavered and we are honored to continue the partnership we began with the government and people of Macao 20 years ago,” said Sands CEO Rob Goldstein. “In the coming decade and beyond, we will remain steadfast in our strategy of continuous investment in Macao — in its economy, its people and its community. Macao’s future as an international tourism destination remains bright and we look forward to furthering our leadership role in helping it reach its full potential.”
Executives for Sands, Macao’s market leader with six resort properties there, have repeated in earnings conference calls with investors that they believed Macao would return to being a strong market once more visitors were allowed into the region.
China has a strict zero-tolerance policy toward COVID-19 and has closed borders and shut down casinos whenever an outbreak has occurred. The policy has kept visitation and gaming revenue way below historic levels for the past two years.
Rough ride
Annual revenue from casino gambling in Macao peaked at $45 billion in 2013, but declined after Beijing imposed tighter restrictions on how often mainland gamblers could visit, according to The Associated Press
By 2019, before the pandemic, gambling revenue sank 19 percent from 2013′s level to $36.4 billion. In 2020, it plunged 80 percent to just $7.6 billion. Last year, revenue climbed back to $10.8 billion, but that is down 75 percent from 2013, according to The Associated Press
In the latest quarter, the economy shrank by another one-third from last year’s depressed level due to anti-virus controls imposed after outbreaks in June, according to the government. It said gambling revenue plunged 72.5 percent. and tourist arrivals shrank 50.8 percent.
Macao is expected to release November revenue statistics Thursday.
Concession renewals have been a hot topic in Macao all year. Companies bidding for a license had to submit a plan to the government for review in September. High on the list of government priorities was for companies to invest in nongaming amenities.
Sands’ Macao operation is directed by Sands China Ltd., a subsidiary, and the president of that company also was appreciative of being selected.
“The entire company is elated at the news of our successful bid for a new 10-year gaming concession,” said President Wilfred Wong. “We are grateful to each of our 25,000 team members for their tireless support and dedication. Our gratitude also goes to the tender committee for its meticulous and thoughtful consideration of the tender submissions. We will do our utmost to further contribute to Macao’s economic diversification and its continuing development into a world-class international tourism destination.”
Looking forward
Wynn Resorts also released a statement.
“Wynn Resorts is pleased to announce that Wynn Resorts Macau received a provisional award of a gaming concession from the Macao government,” the statement said. “The ultimate award of the gaming concession contract remains subject to the final documentation of its exact terms and conditions with the Macao government.”
“MGM Grand Paradise Ltd. (MGM Grand Paradise) would like to express our sincere gratitude to the government of Macao Special Administrative Region for granting us the provisional award of a new gaming concession, allowing us to contribute to the future development of Macao’s integrated tourism and leisure industries,” the MGM statement said.
Holistic tourism future
“We fully devote to the Macao SAR. We will continue to develop the city with our strengths and contribute to the non-gaming industry, meanwhile making vigorous efforts in expanding the tourist markets from foreign countries.
“With confidence in the future of the Macao SAR, we firmly believe in Macao’s full recovery and continue to grow, becoming even stronger as a holistic tourism destination. MGM Grand Paradise will continue to work with all sectors of the society to a new chapter in the development of tourism, leisure and entertainment and create a milestone of ‘Integrated Tourism in Asia.’”
The Review-Journal is owned by the Adelson family, including Dr. Miriam Adelson, majority shareholder of Las Vegas Sands Corp., and Las Vegas Sands President and COO Patrick Dumont.
