Macau surprised the industry last week by announcing initial details regarding its next regulatory environment. The operating concessions for Sands, MGM, Wynn, Melco, Galaxy, and SJM are set to expire in June.
SAR government officials confirmed on Friday that the industry will retain a six-operator market. The fresh tenders, however, will run for 10 years instead of 20, subconcessions and VIP junket groups are no more, and the effective tax on gross gaming revenue will likely inch slightly higher from its present 35 percent rate.
The Macau six are perfectly fine with the changes. All released statements thanking SAR officials for settling on a regulatory framework that appeases both the operators and the enclave.
Key Matter Remedied
Macau, the world’s richest gaming market prior to the pandemic, embarked on an effort to update its gaming laws for the first time since its casino market expanded soon after the enclave’s return from Portugal to China in 1999.
One suggestion floated for the new regulatory tenure was to require each casino concessionaire to be appointed a government official. That person’s primary task would be to oversee the company’s operations. Heavily opposed by the casinos, the idea was scraped from the new law.
"Sands is grateful to the SAR government for providing clear guidelines on several proposed changes following feedback from the industry and the general public,” a Sands China statement read.
A comment from Wynn said the company was “encouraged” by the Macau government taking into consideration “the views of the industry” in finalizing its new regulatory regime. MGM thanked local officials for the legal guidance, with “ample timing” that allows the company to prep its tender submission.
The three Hong Kong-based casino operators additionally expressed their gratitude to the regional government.
Macau has not announced when the six companies will be able to submit their relicensing applications. While the concessions are set to terminate June 26, Macau’s present gaming law allow the government to extend the permits one time for a period lasting up to five years.
With insight into Macau’s next gaming environment continuing to be revealed, and conditions seemingly appeasing the casino operators, investors have been buying up shares. After a robust trading day on Friday, shares traded on the Hong Kong Stock Exchange made further gains today.
Sands China was up 14.6 percent today, MGM China 11.7 percent, and Wynn China 12 percent. Galaxy climbed seven percent, while SJM and Melco both gained five percent.
Despite the considerable gains over the past two trading days, the Macau casino stocks are still down roughly 50 percent from their 2019 trading levels.