Melco unveils details of recently obtained Macau license, 10-year investment plan
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Melco Resorts & Entertainmenthasannounced details of the ten-year concession it has been awarded to operate casino gaming in Macau. The new concession, signed Friday, runs for a period from December 31 until January 1, 2023.
Under the new concession, the company is authorized to operate the Altira Casino, City of Dreams, and Studio City as well as the Grand Dragon and the Mocha Clubs. Melco was issued 750 gaming tables and 2,100 electronic gaming machines. Melco’s previous table allocation under the table cap was 946 tables, meaning its number of tables will reduce by 196, or 21%, under the new concession rules.
The operator will pay an annual premium to the Macau SAR of MOP$30 million ($3,7 million)plus a variable amount calculated in accordance with the number of gaming tables and electronic gaming machines operated. The variable amount is MOP$300,000 for each gaming table reserved exclusively for certain kinds of games or players; MOP$150,000 for each gaming table not so exclusively reserved; and MOP1,000 for each electronic gaming machine, subject to a minimum annual payment of an amount required for the operation of 500 gaming tables and 1,000 electronic gaming machines.
Special gaming tax is currently payable at a rate of 35%. Contributions of 2% and 3% of gross gaming revenue are payable by Melco to a public fund and to urban development, tourism promotion, and social security, respectively. "These contributions may be waived or reduced with respect to gross gaming revenue generated by foreign patrons under certain circumstances," the operator noted.
In addition, a special premium may be due by the concessionaire in the event the average gross gaming revenue of the gaming tables does not reach the annual minimum of MOP7,000,000 and the average gross gaming revenue of the electronic gaming machines does not reach the annual minimum of MOP300,000.
Moreover, under the concession, the registered share capital and net asset value of Melco Resorts Macau cannot be less than MOP5 billion ($623,5 million). The deal also establishes Melco must maintain a guarantee issued by a bank in favor of the Macau SAR in the amount of MOP1 billion (equivalent to approximately $124.7 million) until 180 days after the earlier of the expiration and termination of the concession.
Additionally, the concession further requires that the Managing Director of Melco Resorts Macau must be a permanent resident of the Macau SAR, and must hold at least 15% of the registered share capital of the company.
In connection with the agreement with the city, Melco has undertaken to carry out investment in the overall amount of MOP 11,823,700,000 ($1.4 billion), which can include gaming and non-gaming related projects in the expansion of foreign market patrons, conventions and exhibitions, entertainment shows, sports events, art and culture, health and well-being, thematic entertainment, gastronomy, community and maritime tourism and others.
Melco has further undertaken to carry out incremental additional non-gaming investment in the amount of approximately 20% of its initial non-gaming investment. And on the termination or expiry of the concession deal, the casino premises operated under the deal and the gaming equipment would automatically revert to the Macau SAR "without compensation."
