Casino Industry Directives Issued for Macau Involving Licensing

Macau casino industry

Officials in Macau have now revealed details involving changes to the casino industry, including the operation period for license holders.

Changes are coming to Macau’s gambling industry. This week, government officials made an announcement involving the casino operators of the SAR. The number of new operators allowed to offer services remains at six, however, the operating period is limited to 10 years. In the past, the concessionaires were given 20 years with a license to offer services. It was expected that the number of licensed providers would change, so operators were happy to see the number remain at six.

Details on the Announcement

Macau is considered one of the biggest gambling hubs in the world and over the years, has faced scrutiny by the government. Authorities have been focused on stopping illegal cash flow from mainland China and targeting those who are illegally offering cash transfers or lending funds via underground means.

The government reportedly decided to void proceeding with a proposal for an official to be a supervisor over casinos after receiving feedback from operators. Currently, there are six operators offering services in Macau; Wynn Resorts, Las Vegas Sands, MGM Resorts International, Galaxy Entertainment, Melco Resorts, and SJM Holdings.

Each of these operators licensing will expire in June 2022. There was a fear that officials would decide to cut the number of license holders back considerably, which would leave a few of the operators without the ability to offer services in the region.

After the announcement was made involving the licensing decision, stocks for Las Vegas Sands and Wynn Resorts jumped by 10%.

Moving Forward

Government officials announced that all existing license holders or potential operators will need to apply for licensing via the new tender process. It is unclear if this process will involve bidding or if existing operators will see the current term for licensing extended.

Operators must offer more capital now, at 5 billion patacas ($623.67m). This is quite an increase in the requirement, as it was previously set at 200 million patacas. The director of each company that is based in Macau must hold 15 to 10 percent, which is also an increased requirement.

Stocks of Macau casinos lost billions last year when the public gaming consultation was set to begin. There was fear that the consultation would result in major changes for the industry. Nine areas were focused on, along with the number of licenses on offer, welfare of employees, and potential government supervision of the venues.

Overall, Macau gaming operators are focused on continued growth and recovery. The region was hit hard by the COVID-19 pandemic, but not in the way you might think. The region cut off contact outside the island, not letting anyone come in after the virus first started.

Macau has been so strict regarding the virus that it has seen very few cases in general. However, the restrictions led to zero visits for quite some time and then restrictions and quarantine requirements opened the industry once again, but still numbers were down.

Macau needs travelers in order to be successful. Right now, restrictions are still in place connected to areas like Hong Kong that bring in a larger number of tourists. Without travelers from the regions, the country lacks enough people to book hotel stays and play casino games.

We shall see over the next few weeks how COVID changes things and hopefully travel in the region will open back up. By June, we should also have more of an idea as to how licensing should work and if the current operators will be back in action or if others will enter the fray.

Associate Writer: Simon loves to bet on sports as well as play online slots, and he has a keen eye for sorting out the honest sites from the not so honest.