The six incumbent operators will retain their concessions and will be awarded a 10-year license, ending the major uncertainties surrounding the concessionaires who have long been bleeding cash.
Malaysian firm Genting has failed to make the cut.
The decision was long awaited with several rounds of deliberation, which also concluded the overhaul of the city’s gaming laws wherein the government now has more control over casino operations.
On Saturday, the committee for the gaming concessions public tender announced the incumbent six operators had met the requirements of the SAR government in ensuring local employment, boosting foreign tourist source markets, and developing non-gaming projects. The contracts will be awarded before the end of the year to the six winners of the concessions.
This decision was announced via executive order by the Chief Executive and published Saturday in the Official Gazette. The operators are MGM Grand Paradise Limited; Galaxy Casino Company Limited; Venetian Macau Limited; Melco Resorts (Macau) Limited; Wynn Resorts (Macau) Limited; and SJM Resorts, Limited.
At a press conference Saturday morning, the chairman of the committee, Secretary for Administration and Justice Andre Cheong confirmed the list was ordered by score attributed by the committee to each company. MGM’s bid received the highest score while SJM was awarded the lowest score among the successful bidders.
Cheong did not disclose how each company actually scored nor the committee’s evaluating criteria.
“Each party was aware of the gameplay, and they all accepted it,” he said. “The committee has also undertaken multiple rounds of negotiations with the bidders to assist them in perfecting their bids.”
“The operation and development of our gaming industry has come to a certain scale today, but there are also some problems. For example, the source of our tourists is too concentrated. It’s not healthy,” Cheong further said.
It was either “go big or go home” for the seven hopeful bidders who submitted their gaming proposals to the government on September 14.
All proposals were submitted in medium to large cardboard boxes on pallets and labeled as original documents, along with copies.
Casino operators must maintain MOP5 billion in cash during the 10-year license period.
Although, there were many who had hoped for a change in the landscape, Macau-based gaming expert and managing partner of IGamiX Management & Consulting Ben Lee noted that “employment stability appears to be the major driver of this latest concession tender.”
“Even the rumoured focus on operating expense rather than capital expenditure for the next decade of commitments appears to support this contention,” Lee told the Times.
Earlier this month, it was alleged that gaming bidders had pledged MOP100 billion in non-gaming investments, despite the sector bleeding cash with no certainty on recovery.
With the embattled gaming sector suffering slumps – particularly this year when July recorded its worst gross gaming revenue in decades – the potential return over the next 10 years is unclear, particularly amid the industry-wide reshuffle.
Lee has considered this report as a “noose around the operators’ necks” as that cost will not be easily shed at the next downturn.
Recently, the Secretary for Economy and Finance, Lei Wai Nong, has reiterated in his Policy Address for 2023 that the government has made it very clear that there is a need to develop the non-gaming sector while admitting that “the gaming industry is essential but is also the one thing undermining diversification.”
“What appears to be the main outcome is an extraction of more detailed plans from the various concessionaires on their non-gaming commitments over the next ten years, something that was missing in the original concessions,” Lee said.
In the city’s biggest overhaul of the gaming law, the government has required bidders to submit proposals on future work that will be undertaken in the area of corporate social responsibility (CSR) for them to be awarded a license.
Meanwhile, former lawmaker António Ng Kuok Cheong has commented that the incumbent gaming operators have “superficially taken their CSR and avoided outspoken dismissal and salary deduction.”
For Ng, the government should prepare well to take public supervisory measures in the next 10 years to further supervise concessionaires to take their CSR in terms of protecting local employment.
