Macau Chief Executive Fernando Chui Sai On said the territory’s government will be ready to launch a public tender of its casino licenses when they expire in 2022, dashing the hopes of its six incumbent operators that their massively lucrative concessions would be extended past that date.
Chui’s comments, made during a recent session of the Legislative Assembly, amounted to the first clear indication that the government intends to bid out the licenses, which it has done only once before, back at the turn of the century, shortly after Macau reverted to Chinese sovereignty after centuries of Portuguese rule.
The six operators—Sociedade de Jogos de Macau (SJM), Galaxy Entertainment, Wynn Macau, Sands China, MGM China and Melco Resorts & Entertainment—had reason to believe their 20-year licenses would be renewed, at least in the short term, as a matter of course after SJM and MGM were granted two years of leeway beyond the scheduled expiration of their licenses in 2020 to bring them into line with the other four.
The rationale was that the next administration would require time to formulate policies of its own regarding a public tender.
Chui’s term as chief executive expires in December. An election to choose his successor will be held in August.
Investment analysts, together with some legal experts, generally assumed as well that a new tender process would not take place before the middle of the next decade.
In support of that expectation they have cited a provision in Macau law that provides for extensions for up to five years at the discretion of the chief executive, after which any new concessions have to be granted through an international public tender.
But in response to a question from legislator Leong Sun Iok, Chui indicated that that will not be necessary.
“As to whether we will authorize a (short-term) extension for the (current) gaming operators, I think we now have sufficient conditions (to launch a public tender),” he said. “For instance, we have sufficient time to make amendments to (existing) legislation and time to prepare the tender. So, at this moment, I don’t see any need for delaying the tender.”
He also provided some guidance into how bids would be assessed, pointing up the importance of non-gaming development, in line with the territory’s oft-state goal of becoming an international tourism destination, and of taking special care to provide for the economic and social welfare of the local workforce.
He stated further that the government would be “happy to listen to public opinion” regarding the process.
