Gambling giant Macau opens bids from seven casinos, Genting a wildcard (updated)

HWGG Entertainment

16/09/2022 05:06

(Adds details on Genting, updates story after bid opening)
    By Farah Master
    HONG KONG, Sept 16 (Reuters) - Macau's government opened
bids on Friday 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  LVS.N  Macau unit
Sands China  1928.HK , Wynn Macau  1128.HK  and MGM China
 2282.HK .
    All six incumbent Macau players, which also include Galaxy
Entertainment  0027.HK , Melco Resorts  MPEL.O  and SJM Holding
 0880.HK , submitted bids ahead of a deadline on Wednesday
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
multi-billion dollar properties. They have collectively invested
some $40 billion in Macau since casinos were liberalised 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 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 6,
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 Sept. 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.
    
    
 

($1 = 7.8478 Hong Kong dollars)

 (Reporting by Farah Master; Editing by Kim Coghill)
 ((farah.master@thomsonreuters.com; +852 3462 7709;))