Macau casino licence renewal process made clearer

The Macau government announced that the re-tendering of Macau casino concessions will see the number of licences granted limited to six, with a concession length of 10 years.

Inside Asian Gaming reports that it was also announced that all existing or potential concessionaires will have to proceed through a new tender process to be awarded a concession and that the concept of sub-concessions will be discontinued.

The news suggests Macau’s six current concessionaires are well positioned to be granted new licences once the upcoming re-tendering process is complete.

It remains unclear whether re-tendering will take place before 26 June 2022 or if the current concessions, due to expire on that date, will be extended.

Instead, government representatives Cheong Weng Chon, Secretary of Administration and Justice, Ku Mei Lang, Chief of Staff for the Office of the Secretary for Economy and Finance and Ian Lin, Advisor to the Office of the Secretary for Economy and Finance, said the current licences would be extended for only a “short term” if re-tendering cannot be completed in time.

Cheong, Ku and Ian did confirm some other details around amendments to Macau’s gaming law, including a minimum capital requirement for concessionaires of MOP$5 billion and a requirement for a Macau-based managing director to hold a 15 per cent interest in the company (formerly 10 per cent).

A proposal to appoint a government representative to the board of directors of each concessionaire will not be implemented.

It was also revealed that the executive council has now concluded discussion on amendments to Macau’s gaming law, with the new framework sent to the Legislative Assembly for consideration on January 14.

In September, Macau casino stocks plummeted on the news that the region’s government would hold an in-depth review into its gaming law.

Investors feared a Beijing-backed regulatory crackdown, but few of their worst fears have been realised.

While the six concessions appear to be tailor-made for those existing operators, they will still have to bid for them and other companies are welcome to join the public tender.

More tourists set to descend upon Macau by mid-year

Macau’s recovery in gaming tourism is set to ramp up in 2022 according to new guidance issued by Fitch Ratings.

The institution said that after small scale COVID-19 outbreaks across mainland disrupted an otherwise steady resumption of tourism inflows in the second half of 2021, travel precautions will ease as 2022 develops.

Travel precautions around the Lunar New Year in early February and the Winter Olympics were “likely to result in subdued activity” in the first quarter.

“But we expect the recovery to gain steam in mid-2022, underpinned by higher vaccination rates and the phased resumption of group tours and e-visa for mainland tourists,” the ratings agency said.

The comments were part of a Fitch Ratings 2022 Greater China outlook report, published by analysts Andrew Fennell and George Xu.

Fitch said the Greater China region would face a “more challenging growth environment in 2022, following robust economic growth during much of 2021.”

Macau’s economic growth forecast to be higher than first expected

The ratings agency forecasts economic growth in Macau at 36 per cent in 2022, up from an expected 25 per cent in 202, “with the phased resumption of group package tours and e-visas for mainland China residents.”

The institution’s outlook on Macau’s ‘AA’ ratings was revised to stable from negative in April 2021, given the city’s “nascent economic recovery and its resilient public and external balance sheets.”

According to Fitch, Macau will in the coming year “maintain its explicit COVID-zero policy and prioritise the return of mainland tourists.”

A sustained recovery, however, “will hinge on China’s evolving policies towards cross-border travel and gaming, which could be temporarily disrupted by virus outbreaks,” it added.

The report also suggested that the “explicit alignment of public health strategies between mainland China, Hong Kong and Macau should permit the normalisation of cross-border business travel and tourism, and boost services trade.”