The gambling giant Melco Resorts has become one of the first gambling operators in Macau to apply for an extension of its casino operating license. As confirmed by its CEO and chairman Lawrence Ho, the company is willing to extend its operating permit in the special administrative region (SAR) for another six months at a time when a final draft of licensing and regulatory agreements is expected to be officially unveiled later in 2022.
The license application filed by Melco Resorts comes after the Secretary of Economy and Finance of Macau announced a decision to extend the existing companies’ operating permits by six more months. At the time when the announcement was made, Lei Wai Nong revealed that the companies would not have to worry about losing their casino operating rights until the end of the current year, especially with a final legislative framework on its way.
The Government is currently proceeding with a revised gaming law that would reshuffle the regulation in Macau. As previously revealed, casino operating permits will no longer be granted for extended periods of time. The latest regulatory changes will now limit the licenses to 10 years and after the expiration date of the permit comes, operators will have to prove they are once again eligible to receive a new casino operating permit.
Casino Operators in Macau Facing Financial Difficulties Due to Covid-19 Pandemic and Local Restrictions
According to gambling market experts, the latest move of Melco Resorts is probably not an isolated case, considering that the rest of the casino operators have already submitted their own paperwork to do the same thing or have prepared the necessary documentation for their license extension. Currently, the casino licenses’ expiration deadline is June 26th, 2022, with a 6-month extension to December 31st, set to follow.
Regardless of the favorable decision of the local Government to extend the deadline for the existing casino operating permits, not all is well for gambling operators in the special administrative region of Macau. The CEO of Melco Resorts shared with a Chinese media outlet that the negative impact of the coronavirus pandemic is still an issue that affects its profitability. For the time being, the Government of mainland China still restricts cross-border movement because of fears that Macau may prove a Covid-19 spreading center back to the mainland. The limited inflow of tourists for the Chinese New Year was also among the problems faced by the local casino companies.
At the same time, the 17-million city hub of Shenzhen has been locked down by the Government as a measure to prevent the spreading of coronavirus after the city has reported several dozen cases. These moves have added to the financial troubles experienced by casino operators in Macau that are now expected to pay between $6.2 million and $10 million to have their operating permits renewed.
Despite all setbacks faced by the special administrative region in the last two years, Macau remains hopeful that it can generate significant growth in its hospitality and hotel sector, as the local Government is willing to revitalize its economy and become less dependent on gambling operations.