License jitters set for casino amid Covid hit
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Macau said yesterday that global gaming operators can submit bids for new licenses from July 29 until September 14 but that it cannot guarantee the number of licenses would stay the same at six.
The licenses of the six current operators Sands China (1928), Wynn Macau (1128), MGM China (2282), Galaxy Entertainment (0027), SJM (0880), and Melco International Development (0200) expire at the end of the year.
They must bid for new licenses to remain alongside new players also vying to operate.
Companies must provide a guarantee of not less than 10 million patacas (HK$9.71 million) and submit the required qualification documents.
When bidding, "special consideration should be given 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."
Macau set up a committee to vet bidders for the licenses, with a decision expected in the fourth quarter.
Although the maximum number of licenses to be granted is six, it does not mean all six licenses would be issued as the authorities would review the bids to see if they met the requirements, said committee chairman Cheong Weng-chon, the secretary for administration and justice, yesterday.
The rebidding takes place amid Macau's worst outbreak of Covid, which led to a 12-day closure of casinos this month, and, while they have reopened for staff to return, there is no business as restrictions are only being lifted slowly.
Secretary for Economy and Finance Lei Wai-nong said the annual gross gaming revenue target of 130 billion patacas has to be adjusted, especially given the impact of the current Covid wave, and therefore, the government has submitted a budget amendment to the Legislative Assembly.
Failure to secure new contracts, set to begin next year, means current operators will be banned from operating casinos in which they have invested billions over the past two decades.
At a time when other gambling hubs are getting busy again, Macau's Covid curbs are burning through about US$600 million (HK$4.7 billion) each month. The casinos are expected to have little to no income for months, analysts say.
The sector has been reeling since the start of the pandemic, with revenues sliding 70 percent last year to US$10.8 billion from US$36 billion in 2019.
But the prospect of not being able to operate in future is more daunting than what casinos hope will be a short-term liquidity shortage.
