Gambling giant Macau opens offers for seven casinos, Genting a wild card

A woman walks past a Bank of China branch next to the Grand Lisboa (R) hotel and casino in Macau, China December 21, 2019. REUTERS/Jason Lee

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HONG KONG, Sept 16 (Reuters) – The Macau government on Friday opened bids from seven companies, including a wildcard from Malaysian operator Genting, for licenses to operate casinos at the world’s biggest gambling center, kicking off a closely watched battle for six available slots.

Macao’s senior officials, including the city’s Secretary of Economy and Finance, Lei Wai Nong, and Secretary of Administration and Justice, Andre Cheong, attended the opening with senior leaders of the Macau casinos Las Vegas Sands (LVS.N) Macau unites Sands China (1928.HK), Wynn Macao (1128.HK) and MGM China (2282.HK).

Macau’s six incumbents, which also include Galaxy Entertainment (0027.HK), Melco Resorts and SJM Holding (0880.HK), submitted bids before the deadline on Wednesday with GMM Limited, a holding company of Genting Group chairman , Sri Lim. Kok Thay, which does not operate casinos in Macau.

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GMM’s bid came as a surprise to many executives and analysts, with some saying it posed additional uncertainty for local operators.

Genting would have been encouraged to apply and would be a good choice given that he is the only operator of the applicants with a strong background in theme parks, said Ben Lee, founder of Macau gaming consultancy IGamiX.

“There’s a chance they could overthrow one of the incumbents. They (Genting) think so too, otherwise they wouldn’t have put HK$10 million ($1.27 million) in bet.”

Genting operates casinos in Singapore, Malaysia, the United States and Britain and has extensive non-gaming operations, a key priority for the Macau government. He has also made a series of investments in China, including a leading ski resort that hosted the Beijing Winter Olympics in 2022.

The sector has been reeling since the start of the COVID-19 pandemic, with revenues slipping 70% in 2021 to $10.8 billion from $36 billion in 2019.

Macau’s new casino licenses are set to begin in 2023 and are crucial for the six licensees to continue operating their multi-billion dollar properties. They have collectively invested some $40 billion in Macau since casinos were liberalized over 20 years ago.

All the companies submitted their bids in person via two large stacks of paper files, transported by trolleys, to the government on Wednesday, according to footage from public broadcaster TDM. They had to pay HK$10 million to apply.

The tender comes as casinos in Macau have come under fire from ongoing COVID restrictions and travel restrictions. Authorities have also rigorously tightened control over gambling operations in the former Portuguese colony via new legislation.

GENERAL MAP

The number of licenses awarded will not change from 6, Justice Secretary Cheong said before the bids were opened. The government will review the proposals and negotiate with the bidders before announcing the winners before the end of the year, he said.

Analysts expect the results to come in late November or early December.

For bids, companies must show “special consideration…to develop foreign tourism markets, experience in operating casino games, investment in gaming and other projects for the benefit of Macau, plans to run the casino, plans to monitor and prevent illegal activities and social responsibilities,” according to a statement posted on the government’s website.

Genting Malaysia confirmed that its indirect subsidiary GMM had submitted an offer to the Macau government in a statement to the Malaysian stock exchange on September 15.

This move is an opportunity to “develop its activity in the leisure and hotel sector, diversify its geographical footprint and participate in recovery prospects” in Macao.

Genting applied for a license in Macau more than two decades ago, but was unsuccessful. Since 2020, he has started the construction of a hotel in the south of the main peninsula of Macau. It should open later this year.

Genting will still be able to operate its resort even if it does not obtain a new casino license, in accordance with Macau laws.

($1 = HK$7.8478)

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Reporting by Farah Master; Editing by Kim Coghill

Our standards: The Thomson Reuters Trust Principles.

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