Image: Reuters Berita 24 English - On Friday, the government of Macau let seven companies, including a wild card from Malaysian operator Gen...
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| Image: Reuters |
Berita 24 English - On Friday, the government of Macau let seven companies, including a wild card from Malaysian operator Genting, bid for licences to run casinos in the world's biggest gambling hub.
This started a battle for six available slots that will be closely watched. Lei Wai Nong, who is in charge of Macau's economy and finances, and André Cheong, who is in charge of the city's administration and justice, were among the top officials at the opening.
So were the top executives from Macau casinos Las Vegas Sands Macau unit Sands China, Wynn Macau, and MGM China. All six current Macau players, including Galaxy Entertainment, Melco Resorts, and SJM Holding, sent in bids before the deadline on Wednesday.
GMM Limited, a holding company owned by Genting Group Chairman Sri Lim Kok Thay that does not run casinos in Macau, also sent in a bid. Many executives and analysts were surprised by GMM's application, and some said it added more uncertainty for local operators.
Ben Lee, founder of the Macau gaming consultancy IGamiX, said that Genting would have been encouraged to apply because they are the only applicant with a strong background in theme parks.
"There is a chance that they can get rid of one of the people in power. They (Genting) agree, or they wouldn't have put down a $1.27 million buy-in bet (HK$10 million)." Genting runs casinos in Singapore, Malaysia, the United States, and Britain. It also does a lot of business that doesn't involve gambling, which is a top priority for the government of Macau.
It has also made a number of investments in China, including one in a top ski resort that will host the Winter Olympics in 2022.
Since the COVID-19 pandemic began, the industry has been in shambles. In 2019, the industry made $36 billion, but in 2021, it will only make $10.8 billion. The new licences for casinos in Macau are expected to start in 2023.
These licences are important for the six casinos that are already there to keep running their multi-billion dollar properties. Since casinos were opened up more than 20 years ago, they have put about $40 billion into Macau. According to video from public broadcaster TDM, all of the companies gave their bids to the government in person on Wednesday.
They did this by bringing two large stacks of paper files on trolleys. To apply, they had to pay HK$10 million. The bidding is happening as COVID limits and travel restrictions continue to hurt Macau casinos. Through new laws, the government has also made it much harder for people to gamble in the former Portuguese colony.
WILDCARD
The number of licences that will be given out will stay at six, said Justice Secretary Cheong before the bids opened. He said that the government would look over the bids and talk with the bidders before announcing the winners by the end of the year.
Analysts think the results will be known by the end of November or the beginning of December.
According to a statement on the government's website, companies that want to bid must show "special consideration...to develop foreign tourist markets, experience in operating casino games, investment in gaming and non-gaming projects for Macau's benefit, plans to manage the casino, plans to monitor and stop illegal activities, and social responsibilities."
Genting Malaysia said in a statement to the Malaysian stock exchange on September 15 that its subsidiary GMM had sent a bid to the Macau government.
The move gives the company a chance to "expand its business in the leisure and hospitality sector, diversify its geographic footprint, and take part in the recovery prospects" in Macau.
Genting tried to get a licence to do business in Macau more than 20 years ago, but failed. In 2020, they started building a hotel in the south of the main peninsula of Macau. It will open sometime later this year.
Macau law says that Genting will still be able to run its hotel resort even if it doesn't get a new casino licence.
($1 = 7.8478 Hong Kong dollars)
