Next year is an important year for casino operators in Macau. The six licensed operators have to prove to the city that they’re worthy of being issued a new concession, but there’s a problem. No one yet knows what is going to be expected of them moving forward. Without some idea of how Macau’s gaming industry is going to be framed, it’s difficult for casino operators to know what to expect. Now, with just a year remaining before gaming concessions are to be awarded, there is a belief that current concessions will have to be extended. The president of Sands China, Dr. Wilfred Wong, is convinced that this must happen.
Concession Uncertainty in Macau
Per Macau law, the current gaming concessions issued to the city’s six operators cannot technically be renewed; only new concessions can be issued. Two operators previously had their concessions extended from 2020 to 2022 so all six would be considered for new concessions at the same time, but there is now a great deal of uncertainty about what might happen next year. There has been talk for months that another extension would be necessary, and Wong feels that this is the only alternative at this point. A maximum extension of five years on each concession is allowed and, since two operators have already been given two-year extensions, a three-year extension of all licenses is possible.
Before the new concessions are issued, Macau is planning on updating its gaming laws. These new regulations and requirements have not been produced yet, and casino operators have to be given time to review them in advance of the issuance of the new licenses. Complicating the matter, Macau will hold elections for its legislative council this September, and the new laws aren’t likely to be ready until after the elections. Wong asserted during a conference call this morning, “Obviously the extension is a very complicated issue, it’s something that the Macau government and the Chinese government will have to look at very carefully. I don’t think the government is in a rush to review the license because they want to do things right…”
Macau Taking a Closer Look at the City’s Future
Prior to the onset of the COVID-19 pandemic, Macau had already begun to explore how to diversify itself to become more than a global gaming hub. It had wanted to attract new tourism segments, including business and family travelers, and this idea has gained more momentum as the city has experienced massive losses due to the pandemic. This is possibly one of the reasons, along with more scrutiny of casino operators, that the new gaming laws are not yet ready. It’s likely that the new regulations will place a larger emphasis on casino operator responsibility in assisting with diversification of Macau’s tourism market, which will play a role in how the new concessions are issued.
There has also been talk of allowing one or two additional concessions to be issued, a topic that is probably leading to a lot of debate among lawmakers, especially as Macau is expected to align itself more closely to China’s ideals. Still, Wong is confident that things are progressing in a positive manner for existing concession holders, and adds, “[Macau legislators] have their own preoccupation at this stage. The Macau government, apart from still working very hard on making sure Macau remains a safe city and all the precautionary measures against COVID, are now preparing for the next legislative council election. The government is operating at a pace where they feel they want to launch the public consultation for the concession renewal towards the second half of this year which we believe might mean it will only happen after the legislative council election.”