Govt looks to amend terms for concession renewal

The Macau government is looking at the possibility of amending the terms and conditions relating to the refreshment of gaming rights for Macau’s current gaming concessions and sub-concessions.

SJM’s and MGM’s concessions are set to expire in 2020, while Wynn’s, Galaxy’s, Melco’s and Sands’ licenses are set to expire in 2022.

According to a government press statement, the Secretary for Economy and Finance, Leong Vai Tac on Monday said while they can be extended exceptionally by Macau’s chief executive to a maximum of five extra years, a new concession process must take place after that.

However, there is no yet formal public process for the concession review. Analysts believe there will be “no free pass” when it comes to renewal, instead that there will be some form of bidding process.

“The government will most certainly run some form of an RFP process with criteria that will make existing concessionaires the evident winners of new concessions (effectively renewals), but likely under new terms, with a potential for economic costs,” said Bernstein in a note on Tuesday.

“We see a very low likelihood of an existing operator failing to have its concession renewed,” it added.

Union Gaming analysts said the government is likely keeping renewals out of the picture to keep Macau’s concessionaires moving towards the overarching goal of diversification.

The brokerage also said they would not be too surprised if a 7th licensee was introduced.

Leong on Monday said the Government will pay particular heed to opinions based on the “Interim Review of Gaming Liberalization for Games of Fortune” when it came to refreshment of gaming rights.

The government would also compare Macau’s gaming industry development with that in other cities, so as to further non-gaming and the diversification of the sector, said Leong.

(Photo from Macau Government Information Bureau)