Macao gambling licenses

By Mabel Chan

Six gambling licenses in Macao will expire in 2020 and 2022, but the government still has not announced a plan for the new open bidding of gambling concessions. Which companies will get the gambling licenses is a topic of social concern.

 

Two gambling licenses, SJM Holdings Ltd. and MGM Paradise Ltd. will expire in 2020. The other four licenses, Melco PBL Gaming (Macau) Ltd., Galaxy Entertainment Group Ltd., Venetian Macau Ltd. and Wynn Macau Ltd. will expire in 2022. The Vice-Chairman of SJM So Shu Fai said earlier that a reasonable arrangement was suggested that the Macao government extend SJM's license for two more years so that SJM and other licensed companies would expire at the same time and together bid for gambling licenses, local media reported.

 

According to "Legal Framework for the Operations of Casino Games of Fortune", if gambling licenses expire, the Chief Executive can extend the license one or more times but the total period cannot exceed five years. Fong Hoc Nang, Assistant Professor of International Integrated Resort Management at the University of Macau, said that if SJM's license is extended for two years, that can make them have two more years to make money, but it is more feasible to perform the open bidding of the gambling license. There are also many opinions in society that agree with this practice.

 

The number of open bidding gambling licenses is also in discussion. Originally the government issued three gambling licenses to SJM, Wynn and Galaxy-Venetian Macau. Later, the government used administrative measures to allow each gambling license to transfer the right to another company once. The result is that the three casino licenses turned into six. The betting duty rate and the rules for compliance were exactly the same. Fong said that Macao's six gambling licenses can support employment at present and it is feasible to maintain six licenses in the future for the overall economic situation of Macao. The number of open bidding of gambling licenses must be an important consideration for the government.

 

Macao, known as "Oriental Monte Carlo" has enjoyed a historical growth of economic development since 2002 after it opened up the casino concessions and has become the world's number one casino center. Many companies around the world want to share a piece of it. At present, among the six gambling companies half of them have a US-funded background. People are curious whether the government will give precedence to local companies in the re-bidding of gambling licenses. Fong claimed that it is not most important to focus on local companies in the re-bidding because the past 20 years have provided the opportunity for the local gambling companies to increase competitiveness to compete with international gambling companies.

 

The director of The Gaming Inspection and Coordination Bureau Paulo Martins Chan said that the work related to gambling licenses expiration is going on and a scoring mechanism is still under research.

 

Meanwhile, Macao's gambling industry may face more competitions in the region. The Japanese parliament has passed a law to legalize casinos in Japan. According to the new law, the first casino will officially open in 2025. Non-executive chairman of Wynn Allan Zeman had indicated an interest in participating in the gambling industry in Japan. This may stimulate some companies to choose to invest in Japan. "For now, it has less impact on Macao just like I took Singapore as an example that the markets of Macao and Singapore are different because the markets of Singapore are more in Southeast Asia," Fong said. "However, 2025, seven to eight years later, there may be quite a few changes such as the passengers' access mode. If the policy changes, the situation may be different." No matter what, the Macao government should pay attention to the trend of Japanese casinos.

 

The gambling industry has become a dominant source of tax revenue for Macao and brought employment opportunities to Macao people. However, the non-gambling elements in Macao are still not enough. The government reiterated many times that it wanted to add more non-gambling elements. "Including other places, Singapore and so on, not based on gambling, they also have many non-gambling elements," Fong said. Gambling elements and non-gambling elements coordinate with each other, estimated to bring a better future to Macao. Although the government still has not announced a plan for the new open bidding of gambling concessions, it is estimated that many companies may want to get a gambling license.

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