The Genting Group’s bid for a Macau gaming concession is now officially acknowledged, without condition. In mid-September, the 11th-hour entry from GMM S.A. was “conditionally admitted.”
The incumbent operators, including SJM Resorts, MGM China, Galaxy Entertainment, Venetian Macau, Wynn Resorts and Melco Resorts, were informed of the decision several days before it became public, according to GGRAsia. Now it’s a seven-horse race for six 10-year licenses. The concessions could be awarded sometime in November, and will take effect on January 1, 2023.
Genting operates casino resorts in Malaysia, where the company is based, as well as Singapore, the United States, the United Kingdom, Egypt and the Bahamas. While many analysts say it’s unlikely that Genting will displace one of the current operators, it may have a leg up on the competition due to its emphasis on non-gaming attractions.
The Macau Gambling Tender Committee has urged all bidders to increase their investments in non-gaming, and the Beijing government also has emphasized diversification of the local economy beyond gaming.
That said, a local academic told Inside Asian Gaming that the tender committee may be expecting too much of concessionaires who are trying to stay afloat in a stalled economy. Eilo Wing-Yat Yu, associate professor of the Department of Government and Public Administration of the University of Macau, told IAG, “The government is a bit out of touch with the actual situation, and it shows that there is confusion in the government’s thinking.”
For one thing, Macau’s zero-Covid environment has all six incumbents burning cash to stay operational. In addition, said Eilo Yu, “Although the chief executive has pointed out that it is a long-term goal to attract foreign visitors, the government has not given a clear indication of when it will reopen the city, but has asked the concessionaires to increase the amount of investment. This will make investors doubt whether the increased investment can yield a return.
“The government’s request is clearly out of step with the actual situation, as the bidding companies are not expecting too much return on their investment in an uncertain economic environment.”
In meetings with government officials, some operators have discussed cuts in employee salaries to save money. Officials declined to share details. According to the Macau Daily Times, the city’s Gaming Inspection and Coordination Bureau (DICJ) says the government will protect the rights of casino workers, but their numbers continue to decline, with fewer than 53,600 full-time jobs in the second quarter of 2022. There are now 24,093 dealers, down more than 500 from the second quarter of 2021.
An estimate from JP Morgan says Macau gaming has shed US$1.5 billion in the third quarter of this year. As reported by GGRAsia, Deutsche Bank Securities Inc. expects the decline to slow to 24.8 percent in the fourth quarter, compared to a 70.4 percent year-on-year contraction in the third.
