Macau Official Says Enclave Government Considering New Gaming Licenses

Posted on: May 13, 2019, 10:11h. 

Last updated on: May 13, 2019, 10:11h.

Devin O'Connor @CasinoorgDevinO Read More
Expertise: Asia Pacific Gaming, Commercial Gaming, Legislation, Politics.

The Macau government is considering issuing new gaming concessions through a public tender process that could expand the number of casino operators throughout the enclave.

Macau casinos gaming license
Macau official Lionel Leong Vai Tac recently updated the media on the enclave’s future gaming industry. (Image: Macau Government)

Macau Secretary for Economy and Finance Lionel Leong Vai Tac broke the news to GGRAsia, the online media outlet focused on Asian gaming matters. Leong told reporters that the Special Administrative Region (SAR) is reviewing whether to issue new gaming licenses.

The world’s richest gambling hub presently has six licensed operators: Las Vegas Sands, MGM Resorts, Wynn Resorts, Galaxy Entertainment, Melco Resorts, and SJM Holdings. Their casinos collectively won more than $37.8 billion last year.

Though $37.8 billion represented a 14 percent year-over-year increase, gross gaming revenue is still down 16 percent from the market’s peak of $45 billion set in 2013.

Gaming Expansion?

Macau – the only place in China where gambling is permitted – is in the process of reducing its dependency on casinos. Amid pressure from mainland authorities cracking down on VIP junket groups, owners of the multibillion-dollar resorts refocused to the mass market with non-gaming amenities and attractions.

Last year’s opening of the Hong Kong to Macau bridge no longer makes the gaming mecca an isolated enclave. With the two SARs now connected via a 35-minute drive across the Pearl River Delta, area officials believe the region is positioned for an economic boom not founded on casinos.

A record 35.8 million visitors ventured to Macau in 2018. The goal is to only increase that number with larger and more frequent MICE (meetings, incentives, conventions, exhibitions) happenings.

But Leong saying new gaming permits are being considered shows the region isn’t folding on its cash cow. The Macau government reported last month that taxes from gaming accounted for nearly 90 percent of its operating budget.

All six licenses are set to expire in 2022 – and all six operators are expected to be granted new gaming privileges.

Casino Licenses

As reported by Casino.org in March, Macau is reviewing all aspects of its gaming industry in an effort to perfect the market. When the licenses expire, new permits are expected to cost each of the six operators $25 million.

Macau isn’t likely to allow a major casino operator such as Caesars into the market with a full-fledged permit. Instead, the SAR is presumably considering issuing sub-gaming licenses that allow smaller resorts to operate slot machines and table games in conjunction with one of the major six.

That’s currently the regulatory arrangement in Macau, but Leong’s comments suggest a freeing of the casino license and hotel operator relationship might be modified in the coming years.

Leong said any license grantee will be required to invest in new non-gaming elements in order to continue the enclave’s overall goal of becoming a destination that not only caters to casino gamblers. GGRAsia concludes that concession holders will need to “enhance social safeguards for employees, and that they should be able to contribute further to the diversification of the city’s economy.”