Morgan Stanley: SAR likely to extend casino concessions for three more years

The SAR government may extend the existing six casino concessions for three more years until 2025, investment bank Morgan Stanley stated in a note published.
The financial institution is expecting the decision to come into effect by June in 2021.
The current six gaming licences for local casinos are due to expire in June 2022. Under the current gaming law, Chief Executive Ho Iat Seng is able to extend the concessions for up to five years.
As stated in the Policy Address for 2021, the government vows to begin revising the current gaming law by the first quarter of 2021. The amendment is expected to be completed by the fourth quarter of next year, before being submitted as a finalised draft bill to the Legislative Assembly (AL).
However, this timeframe may be affected by a public consultation process promised by the city’s leader.
In Morgan Stanley’s announcement, analysts said it could take more than a year for open bidding to conclude as the SAR government must run a public consultation before submitting the bill to AL.
Owing to such time restriction, it may be hard to finalize a public retender process before June 2022.
Local authorities stated earlier that the revision of the gaming law is an essential step prior to a public retender process.
Back in March 2019, the government extended the concessions for SJM Holdings Ltd. and MGM China Holdings Ltd. to June 26, 2022. The new concession expiry date for these two operators coincides with that of the other four operators, which also expire in June 2022.
This move was viewed as “necessary preparation” in case an open bidding process could not be finished before the licenses expired, Morgan Stanley analysts said.
The institution expects the casino operators to pay “a nominal one-time fee only” for each fresh concession.
The report also considered the possibility of a newcomer emerging in the open bid process. “But without a big piece of land to go with it, there will be no competitive threat to the existing players,” the financial institution explained. Staff Reporter