Macau casino operators this week had their first face-to-face with government officials. Those regulators have been tasked with determining changes that will oversee the gaming market’s next operating term.
Officials from Las Vegas Sands, MGM Resorts, Wynn Resorts, Melco Resorts, Galaxy Entertainment, and SJM Resorts attended the first and only planned consultation session between the casinos and Macau Gaming Inspection and Coordination Bureau (DICJ). The meeting, which lasted approximately 70 minutes, was held at the DICJ headquarters at Macau’s World Trade Center.
Casino reps sought clarity on a host of regulatory amendments that have been floated since the DICJ’s 45-day consultation period began on September 14. DICJ and Macau lawmakers have suggested numerous regulatory changes that stand to greatly impact how the six gaming concession holders, as well as VIP junket groups, conduct business.
Among the proposed changes to Macau’s gaming industry — the world’s richest — are more stringent oversight of casinos, including having a government representative supervising gaming operations at all times.
The DICJ has also suggested eliminating the practice of the sub-concessions. Three of the six casino operators — Sands, MGM, and Melco — gained market entry by way of sub-concessions respectively issued by Galaxy, SJM, and Wynn.
Eliminating sub-concessions would be particularly disastrous for Sands and Melco investors, as those two companies derive the majority of their annual revenue in Macau. However, that calamity, Macau officials say, will likely be averted by the Chinese enclave increasing the number of full concessions from three to six.
All six gaming privileges, full or sub, are set to expire in June of 2022. While the regulatory review has caused a massive selloff of Macau casino stocks, Sanford C. Bernstein said recently that the odds favor all six gaming companies receiving fresh tenders. The DICJ says it’s mulling whether the new permits will be for another 20 years, or valid for a shorter time frame.
Another concern is how junkets operate. DICJ brass have suggested that promoters be barred from accepting cash deposits from their clients located throughout Asia for anything other than casino gambling. Junket reps asked DICJ to explain how the proposed penalty of up to five years imprisonment for accepting funds unrelated to gambling would be enforced. No clarification was given.
Casinos are the economic driver in Macau. The gaming industry supports more jobs and delivers the enclave more tax revenue than any other business activity in town.
The regulatory review, Macau officials say, isn’t to hurt the casinos, but better oversee their operations.
We want to reinforce the monitoring on the gaming companies. I want to stress that our regulations need to be updated to ensure that the development of the gaming industry will be sustainable and healthy,” Lei Wai Nong, Macau secretary of economy and finance, told GGRAsia.
Macau officials conceded during the Monday meeting that the financial health and stability of the casino operators will weigh on regulatory decisions. That’s welcomed news to casinos and the Macau population, as COVID-19 resulted in the elimination of 11,000 jobs in the industry.
At the end of 2020, Macau’s casinos and junkets employed a workforce totaling roughly 76,300 people.