Macau concessionaires receive casino license extension
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After a fraught year for concessionaires in Macau, the government of the Special Administrative Region has finally reached a conclusion as to who should receive a license moving forward. All incumbents have been granted a license extension, the Associated Press reported, however much has changed.
For one, Macau has given these licenses on the condition that concessionaries will start focusing on tourism just as much as they do on gambling. Overseas travelers should be the main target group, the SAR government said in an address on Saturday, reiterating the obligations of MGM Resorts, Wynn Resorts, Las Vegas Sands, and local operators. The local operators are represented by Galaxy Entertainment Group, Melco International and SJM Holdings.
All concessionaires have agreed to help bolster the local economy by pulling away from gambling as much as possible while developing other branches of tourism. The news is of course well-met by the current bidders who have been around for decades and who have locked billions worth of dollars into Macau already.
A reason for concern appeared earlier this year when Genting Group Malaysia decided to bid for one of the licenses, becoming the seventh entity to have done so in a race with only six license slots. However, the belated appearance of Genting on the map – while worrying to concessionaires at first – was not enough to convince the government to back the group.
Macau, though, continues to be susceptible to regional and global shocks that lead to disruption of tourism. That is why under the new license extensions, concessionaires would need to help diversify. Part of this process would lie in targeting overseas customers and bringing more money from foreigners rather than Chinese nationals.
Non-gaming projects should also take off before long, including the hosting of global sports events, and more. The six concessionaires may invest as much as $12.5bn together to help Macau transition to a more non-gaming-aligned economy as well.
While the launch of foreign-led casino resorts in Macau in 2002 was a positive thing, leading to a total of 41 casinos operated by the six licensees, the SAR’s industry has become almost exclusively dependent on gaming operations. Revenue in 2013 from dice tables, slot machines and games hit an all-time high of $45bn but it came down crashing during the pandemic in 2020 with just $7.6bn.
Even as the world pulls away from the pandemic, Macau is still buffeted by it, giving the SAR government all the more reason to try and move past its dependency on gaming.
