Everyone is on the same page now… at least time wise.
The mystery of what will happen when the six gaming concessions expire in Macau became a little more clear last week when the government extended the term of the first two concessions that were due to expire next year. SJM and MGM Resorts will now have until June 2022—like the other four concessions—to see how the renewal/re-bid process will evolve.
The government has been tight-lipped about how officials will determine the process, but it was always expected that the two licenses due to expire first would be extended so that whatever decision is made, it would apply to all six concessionaires equally and at the same time.
When Macau first decided to extend gaming beyond the previous monopoly holder, Stanley Ho’s SJM, the plan was to introduce two new licenses. Wynn Resorts and a partnership of Las Vegas Sands and Galaxy Entertainment were giving the valuable ducats. But when it became apparent that the LVS-Galaxy shotgun wedding wouldn’t work out, the government granted a subconcession to Galaxy, and in turn allowed Wynn and SJM a subconcession each. MGM Resorts was granted one of the sub-concessions in partnership with Stanley Ho’s daughter, Pansy Ho. And Wynn agree to sell a subconcession to Melco Crown, a partnership of Melco, owned by Stanley Ho’s son, Lawrence Ho, and Crown Resorts, controlled by Australian billionaire James Packer. Crown eventually withdrew from the partnership, and it was renamed Melco Entertainment.
Renewal of the concessions has been a major concern for the companies and their investors. The options for the government are to re-bid all six concessions, renew them with few changes or to add more concessions. There are several groups that want into the lucrative Macau market and have been lobbying for either a rebidding process or additional concessions.
Macau is interested more in diversifying its gambling economy. Officials have limited the number of table games that any casino could add, even new casinos. They have also urged increased non-gaming amenities and the companies have largely responded by including convention facilities, more retail and entertainment amenities in the new IRs that have opened in Cotai in the last three years.
The extension of the two concession agreements, which will cost each company a one-time fee of $25 million, will give the government of Macau enough time to consult with the federal government about how the renewal of all six concessions will be handled. The extension coincides with the selection of a new Macau chief executive to replace Fernando Chui Sai On, who has been in power for more than five years now. Chui was only the second chief executive to rule since the expansion of the gaming enterprises in 2000.
Meanwhile, in a case related to the granting of the Las Vegas Sands concession, the company settled a 15-year-old lawsuit with consultant Richard Suen in Las Vegas. Suen claimed he was instrumental in getting the Macau government to approve LVS and was never paid for his services. Suen had won two previous rulings in Nevada only to see the awards, one as high as $45 million, thrown out by a higher court because of trial technicalities.
A third trial began last week, but would have proceeded without the testimony of LVS Chairman and CEO Sheldon Adelson, who is battling cancer. It ended abruptly when a settlement was announced. No details were released but an attorney for Suen said his client was “very pleased” and no further appeals would be filed.
