Inside Asian Gaming

INSIDE ASIAN GAMING MAY 2018 22 “A seventh license feels more likely than ever …We believe there is a desire for a majority of gaming revenue to be captured by Chinese companies and with this in mind a seventh license would make a lot of sense.” – Grant Govertsen COVER STORY them in line with the other four concessionaires. “This will give some time for the government to decide what to do next,” adds Professor Desmond Lam, Professor in International Integrated Resort Management at the University of Macau. In theory, SJMandMGMcould have their license renewed through 2025, while Galaxy, Wynn, LVS subsidiary Sands China and Melco Resorts (who bought Crown’s stake in 2017) could run until 2027. But that extra five years – after which time the concessions cannot be extended any further – would only be delaying the inevitable. Instead, unless the law is changed, it seems far more likely that the government will initiate a public tender requiring all six concessionaires and any other interested parties to state their case to be granted a new Macau gaming license from 2022. In fact, under Section of 8 of Gaming Law 16/2001, the grant of concessions for the operation of games of fortune must be put to public tender and Macau’s Secretary of Economy and Finance, Lionel Leong, has recently hinted this will be the case. Exactly what a public tender process might entail – or even when details might emerge – remains a mystery, despite the government stating last year that it would provide an update on the re-licensing process sometime around mid-2018. As Union Gaming’s Head of Asia Equity Research, Grant Govertsen, tells Inside Asian Gaming , “It is entirely likely that we will not hear anything incremental about the licensing process in the coming months.” When we do, Govertsen adds, prospective licensees can expect a “hefty one-time fee” to be re-licensed. Professor Glenn McCartney, Acting Associate Dean, Faculty of Business Administration at the University of Macau, predicts the licensing process will require far more than funds, with potential clauses including demonstrable provisions of non-gaming amenities as per the government’s recent push for greater diversity among Macau’s IR operators. “There will be changes to the licenses,” he told Portuguese language publication Tribuna de Macau in an April interview. “It is important to remember that it will be a new contest and not a renewal, so it is open to international companies to compete and Could junket leader Suncity become Macau’s seventh concessionaire?