Macau's gambling giant opens offers at seven casinos and one company may lose
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HONG KONG, Sept. 16 (Reuters) – The Macao government opens offers from seven companies on Friday, including a wildcard from Malaysian operator Genting, for casino licenses at the world’s largest gambling center, kicking off a closely watched battle over six available slot machines.
Macao’s top officials, including Lei Wai Nong’s city’s economic and financial secretary and André Cheong, secretary of administration and justice, are expected to attend the opening with Macao’s casino bosses, including the Las Vegas Sands (LVS.N) branch in Macau Sands China (1928.HK), Wynn Macau (1128.HK) and MGM China (2282.HK).
All six current Macao players, including Galaxy Entertainment (0027.HK), Melco Resorts and SJM Holding (0880.HK), submitted bids ahead of Wednesday’s deadline along with GMM Limited, the holding company of Genting Group president Sri Lima Kok Thay, which does not operate casinos in Macau.
The GMM conclusion was seen as a surprise to many executives and analysts, with some saying it added additional uncertainty to local operators.
Genting would be encouraged to apply and would be a good option considering they are the only applicant operators with extensive amusement park experience, said Ben Lee, founder of the consulting firm IGamiX in Macau.
“There is a chance they could bring down one in attendance, they (Genting) think so too, otherwise they wouldn’t have placed a bet of HK 10 million ($ 1.27 million).”
Genting operates casinos in Singapore, Malaysia, the United States and the United Kingdom, and conducts extensive non-gaming operations, a key priority for the Macao government. The company has also made a number of investments in China, including a first-class ski resort that will host the Beijing Winter Olympics in 2022.
The sector has been trembling since the start of the COVID-19 pandemic, and revenues fell 70% in 2021 to $ 10.8 billion from $ 36 billion in 2019.
Macao’s new casino licenses are expected to start in 2023 and are critical for the six incumbent operators to continue servicing their multi-billion dollar real estate. Altogether, they have invested around $ 40 billion in Macau since the casinos were liberalized more than 20 years ago.
All companies submitted their bids in person via two large piles of paper folders, transported by trolleys on Wednesday, according to footage from public broadcaster TDM. To apply, they had to pay HKD 10 million.
Auctioning comes after Macau’s casinos have been slammed by current COVID and travel restrictions. Authorities also rigorously tightened controls over gambling operations in the former Portuguese colony through new regulations.
The government is expected to analyze the proposals and negotiate with bidders before announcing the six winners by the end of November or early December, analysts said.
During the auction, “special attention should be paid to the development of overseas tourism markets, experience in operating casino games, investment in games and non-gaming projects for Macao’s benefit, casino management plans, plans to monitor and prevent illegal activities and social responsibility.” said in a statement on a government website.
($ 1 = 7.8478 Hong Kong dollars)
Register reporting by Farah Master; Edited by Kim Coghill
