Macau Grants SJM and MGM Extensions to 2022

The government of Macau, an autonomous region on the south coast of China, has officially approved the extension of gaming permits until June 26, 2022…

…for both SJM Holdings and MGM China Holdings.

Although it was expected from Macau officials to make such a move, they said in an announcement that they did this in order to gather them in line with other Macau operators.

A Two-Year Extension

During the next two years, SJM and MGM will have to pay $24.7 million to the Macau government. But, not only that; both companies will have to the city’s “Non-mandatory Central Provident Fund System,” and also set up a labor creditor rights protection fund in the future.

Both SJM and MGM were about to have their license expired in March 2020, but the new deal prolonged their stay in Macau. Currently…

…Macau doesn’t issue longer extensions of licenses, but the plan is to revise the law in the future and change this clause.

A Word from the Analyst

“At some point in 2020 the new government and the legislature will begin studying the concessions in earnest, but will likely need a few years to come to any conclusions,” Grant Govertsen, an analyst with Union Gaming Securities Asia, said in a note.

Govertsen also mentioned that he expects that all of the current six concessionaires will obtain their extensions before June of 2022…

…because it is the expiry date.

That way, the market could be analyzed better and the current Macau laws could be revised. But, he also said that he doesn’t expect that Macau will stay with only six concessions.

“At some point towards the middle of the next decade the rebid process will commence and we expect all of Macau Big 6 to remain in Macau; we also expect a 7th (or 8th) concession could materialize in part to clean up the service provider casino construct,” Govertsen added.

Staying on the Macau Market

In order to maintain their licenses to operate in Macau, Govertsen believes that the current six licensees should go through a certain period of redevelopment.

And, it is currently happening…

…since Las Vegas Sands has started the renovations of Londoner Macau at Sands Cotai Central.

It is interesting that other analysts believed that Macau officials want to use the new concessionaires in order to mix things up a little bit on the market and remove some of the American operators in order to favor more preferred options for their Chinese neighbors.

Wynn Macau Gained 5 Stars

Casinos in Macau are definitely some of the most beautiful and luxurious in the world. In the month of February of this year, a luxurious hotel Wynn Macau has once again got awarded by the world-famous Forbes magazine.

The resort is once again named the only resort in the world with a total of eight Five-Star awards on the 2019 Forbes Travel Guide (FTG) Star Rating list…

…and this is the third consecutive year that Wynn Macau was awarded.

Wynn Resorts has got 19 Forbes Travel Guide Five-Star awards and with that has become the only independent hotel company in the world with so many awards coming from this magazine.

Source:

“Macau grants SJM and MGM extensions to 2022”, Derek Tonin, calvinayre.com, March 15, 2019.