According to analysts from the investment bank Morgan Stanley, Macau is most likely dropping its plan for an open tender for its six gaming licenses before June 2022. Instead, the Macau government will most likely extend its current six concessions until 2025. The publication of the banking institution reported that it expects Macau’s decision to be made by June 2021.
The current gaming law allows the city’s chief executive, Ho Iat Seng, to extend the six existing gaming concessions for up to five years. Macau’s government has been stating its plans for a revision of the current gaming law a few times but different circumstances have led to several postponements of the new bill.
According to local authorities, the work on the new gaming law will start by the first quarter of 2021. The current plans are for a new bill to be ready by the end of 2021, as such amendments are much needed before an open tender process. This being said, it is possible that the process may be delayed due to the public consultation that is due to be held by the government.
Analysts are Sceptic About New Gaming Law Being Introduced in 2021
Some analysts believe that the time frame presented by Macau’s governments will be difficult to be met and an open tender process is not very likely to be possible earlier than June 2022. On Friday, Morgan Stanley published its doubts about this case, noting that the public consultation was planned to be held in the second half of 2020. Due to the pandemic and other circumstances, however, it got postponed for the upcoming year. Meanwhile, to be able to fulfill its plan, the government must then present the law in the Legislative Assembly. However, the draft is still not complete and it may take over a year to be ready.
Morgan Stanley stated that if there is an extension of the current six concessions, the operators will have to pay a “nominal amount” to Macau’s government. In March 2019, the government approved the extension of the SJM Holdings and MGM China licenses until June 26, 2022. The remaining four concessions expire in June 2022, which means that all six licenses are due to expire roughly around the same time in 2022. At that time, the operators had to pay roughly around $24.7 million to the government as compensation.
Analysts expect that the Macau government will announce its decision in the upcoming year rather than waiting until 2022. Considering the huge decline in GGR taxes in 2020, the government has to take plenty of action to help the recovery of the gambling industry. The upcoming year is expected to reveal several events that will most likely help the recovery of the tourism sector in Macau. Recently, there were even rumors about the gambling industry in the region adapting the e-yuan. These claims, however, have been denied by the Macau government.
