The Government of Macau is reportedly turning to casino license applications and asking them to increase their investment in the special administrative region (SAR). The largest gambling hub on a global scale has been struggling financially for some time, which may be exactly the reason why local lawmakers are demanding bigger guarantees from companies that are willing to offer their casino services there.
According to media reports, Macau expects the seven casino companies that are currently hoping to receive official permits to offer their services in the special administrative region for another 10-year period to boost their investments. Allegedly, this requirement came spontaneously in the wake of the negotiations that took place last week. At the time, the seven operators filed their final proposals to the Macau government.
Reportedly, Sands China and Galaxy Entertainment have been required to invest $2.5 billion each. Other four casino and gambling companies are set to invest approximately $1.88 each.
As previously reported by CasinoGamesPro, only six operators will be granted casino licenses for a 10–year period in the SAR under the existing rules. Throughout the concession period, the companies will be expected to pay a total of $12.5 billion.
Gambling Companies Would Have to Support Non-Gambling Services as Well
It now seems that the Government of Macau has changed its mind and will actually require companies to make bigger investments. According to reports, Sands China and Galaxy Entertainment would have to invest around $6 billion. The rest of the operating permit applicants will also be required to pay a larger amount than the one that was initially discussed by them and the local authorities. Furthermore, concessionaires might be required to make an investment in local culture, such as hosting annual conventions, sponsoring concerts or building an art museum.
According to market experts, the negotiations between the casino license candidates are set to be brought to an end soon. The Macau Government is set to evaluate the proposals made by the seven bidders and will then officially issue six operating permits to the companies that are found most suitable. This basically means that only one of the candidates will be left out without a license.
As previously reported, the Government of the special administrative region has been trying to offset Macau’s reliance on gambling operations, so they have been eyeing various non-gambling activities that could bring fresh money flows to the SAR. This is exactly the reason why local legislators expect the license applicants to be able to invest in the region, bring more value than simply offer gambling services, and stimulate tourism.
Ho Iat-seng, the CEO of Macau will have the final word on which operators would receive a casino license. Applicants who get a provisional concession will also need a minimum capital of $625 million and provide information to the local Gaming Inspection and Coordination Bureau (GICB). After that, the Government will draft the final contracts and provide gambling companies with five days to express their opinions.
Market experts say that if everything goes according to plan, the final casino licenses are set to be handed out before the end of 2022, which would allow the new contracts to come into force as of January 1st, 2023.