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Gambling giant Macau opens bids from 7 casinos, Genting a wildcard

Reuters
Gambling giant Macau opens bids from 7 casinos, Genting a wildcard

RESORTS WORLD. Signage of Genting Malaysiau2019s Resorts World is displayed at its casino, hotel, and entertainment park in Genting Highlands, Pahang, Malaysia, September 16, 2022.

Hasnoor Hussain/Reuters

All six incumbent Macau players submit bids, together with GMM Limited, a holding company of Genting Group chairman Sri Lim Kok Thay

HONG KONG – Macau’s government opened bids on Friday, September 16, from seven companies, including a wildcard from Malaysian operator Genting, for licenses to operate casinos in the world’s biggest gambling hub, kicking off a closely watched battle for six available slots.

Macau’s top officials including the city’s Economy and Finance Secretary Lei Wai Nong and Secretary for Administration and Justice André Cheong attended the opening together with top executives from Macau casinos Las Vegas Sands Macau unit Sands China, Wynn Macau, and MGM China.

All six incumbent Macau players, which also include Galaxy Entertainment, Melco Resorts, and SJM Holding, submitted bids ahead of a deadline on Wednesday, September 14, together with GMM Limited, a holding company of Genting Group chairman Sri Lim Kok Thay, which does not operate casinos in Macau.

GMM’s application was seen as a surprise to many executives and analysts, with some saying it posed extra uncertainty for local operators.

Genting would have been encouraged to apply and would be a good fit given they are the only operator of the applicants with a strong background in theme parks, said Ben Lee, founder of Macau gaming consultancy IGamiX.

“There is a chance they can topple one of the incumbents. They (Genting) think so, too, otherwise they wouldn’t have laid out a HK$10-million ($1.27 million) buy-in bet.”

Genting operates casinos in Singapore, Malaysia, the United States, and Britain and has extensive non-gaming operations – a key priority for the Macau government. It has also made a series of investments in China, including a prime ski resort which hosted the 2022 Beijing Winter Olympic games.

The sector has been reeling since the start of the COVID-19 pandemic, with revenues sliding 70% in 2021 to $10.8 billion from $36 billion in 2019.

Macau’s new casino licenses are expected to begin in 2023 and are crucial for the six incumbents to keep operating their multibillion-dollar properties. They have collectively invested some $40 billion in Macau since casinos were liberalized more than 20 years ago.

All companies submitted their bids in person via two large stacks of paper files, transported by trolleys, to the government on Wednesday, according to footage from public broadcaster TDM. They had to pay HK$10 million to apply.

The bidding comes as Macau casinos have been slammed by ongoing COVID-19 curbs and travel restrictions. Authorities have also rigorously tightened control over gambling operations in the former Portuguese colony via new legislation.

Wildcard

The number of awarded licenses will not change from six, Justice Secretary Cheong said ahead of the bid opening. The government will review the proposals and negotiate with bidders before announcing the winners before the end of the year, he said.

Analysts expect results to come by end of November or early December.

For the bids, companies 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 prevent illegal activities, and social responsibilities,” according to a statement on the government’s website.

Genting Malaysia confirmed its indirect subsidiary GMM submitted a bid to the Macau government in a statement to the Malaysian stock exchange on Thursday, September 15.

The move is an opportunity to “expand its business in the leisure and hospitality sector, diversify its geographical footprint, and participate in the recovery prospects” in Macau.

Genting applied for a Macau license more than two decades ago but was not successful. Since 2020 it has begun construction on a hotel in the south of Macau’s main peninsula. It is slated to open later this year.

Genting will still be able to operate its hotel resort even if it does not win a new casino license, according to Macau laws. – Rappler.com

$1 = 7.8478 Hong Kong dollars

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