The Macau Chief Executive’s advisory council has announced a framework for a government bill that will allow for new licensing of the former Portuguese enclave’s casino going forward. The current licenses are set to expire in June and are of 20-year duration. Half of the existing operators gained concessions under a sort of loophole that allowed them to obtain sub-licenses from those who won the first tender. Sub-licenses are not going to be part of the new licensing regime’s make-up.
Six 10-Year Licences
Melco, MGM, and Sands‘ Macau units were effectively operating under original concessions granted to Wynn Macau, SJM Holdings, and Galaxy Entertainment Group Ltd. Going forward they will be able to compete for their own 10-year licenses with a provision for a 3-year extension. Six licenses will be tendered in all.
While the bill will be sent to the Macau Legislative Assembly for a vote soon, there is no way to know how long that action will take due to several variables. The Assembly can modify provisions of the bill and earlier statements indicated that the government may insist on a revamp of the city’s gambling law as a parallel or contingent issue to a new public tender.
GGRAsia is reporting that the government may be willing to extend the current concessions if needed for a complete review.
New Ownership and Share Capital Thresholds
Ownership in the companies will need to change to some degree under the current working bill sent to the Legislative Assembly for possible revisions and a vote. At least 15% of the share capital needs to be held by a Macau permanent resident who would be a managing director of the entity. Also, a maximum of 30% of the firm’s shares would be allowed to be listed publicly. A press release from the Executive Council is said to have stated that the share distribution would create a more stable relationship between the firm and the Macau government.
The minimum required share capital would also need to increase 25-fold from the current MOP200-million minimum threshold to MOP5 billion (US$625 million) reflecting two decades of growth and a much higher bar for serious contenders.
In the recent past, the government has said that firms of all nations would be treated equally as long as they meet all of the criteria.
The tax regime is not expected to change from the current 35% levy on gross gaming revenue nor is there any indication of changes to other various taxes and fees that result in a de facto 39% tax rate.
Source: Macau to have 6 casino licences, lasting 10 years: govt bill, GGRAsia, January 14, 2022