Macau Government Urged to Extend Casino Licenses Before 2022 Expiration

  • Gaming sector trade group thinks Macau casino sector won’t recover before concessions expire
  • Authorities have ability to grant five-year extension to current licenses
  • Six concessionaires' permits expire in mid-2022, renewal negotiations delayed by pandemic
  • Analysts believe each operator will keep licenses but will need to meet new demands
  • Gross gaming revenue in Macau fell by 94.5% year-on-year in August despite visitors returning
Macau cityscape at sunset
A local gaming sector trade group is calling on the Macau government to extend the region’s casino gaming licenses before they expire in 2022. [Image: Shutterstock.com]

Trade group calls for renewals

The General Association of Administrators and Promoters for the Macau Gaming Industry has called on the Macau government to extend the operating concessions for the six major casino operators before they expire in 2022.

The gaming sector trade group’s director, Lam Kai Kong, spoke at a recent press conference on the subject, saying there should be an extension of “appropriate” duration. He does not believe the gaming sector will recover from the pandemic before the concessions expire in two years’ time.

concession would be active until mid-2027

The Macau authorities have the ability to extend a current license for five years after its expiration deadline. If such an extension is granted, the concession would be active until mid-2027. 

The current licenses for concessionaires MGM China, Wynn Macau, Sands China, Galaxy Entertainment, SJM Holdings, and Melco Resorts & Entertainment are all set to terminate mid-2022. The expected renewal negotiations have not yet begun in the wake of the COVID-19 pandemic.

As per the Macau Gaming Law, only a public limited liability company that has been incorporated in Macau and has been granted a concession by the government is able to operate games of fortune or chance.

No clear signal given

There has been no real indication from the Macau government as to what approach it will take with the license renewals, despite calls to grant extensions.

Analysts believe that each of the six casino companies will hold onto their concessions, but there will likely be additional demands made of them by the authorities. There are also indications that the government wants to see how the pandemic recovery materializes, potentially prompting an extension.

It is believed there will be more emphasis placed on license holders expanding their non-gaming efforts, such as entertainment, business, and dining amenities. Macau’s economy currently has a heavy focus on gaming operations, with government officials now pushing for diversification.

Macau Chief Executive Ho Iat Seng recently said he would not be commenting on gaming license renewal until the completion of an extensive review of the region’s gaming-dependent economy by the local authorities.

Casinos struggling to recover

Macau economy has been hit hard by the COVID-19 pandemic. While casinos were only closed for a couple of weeks in February, gaming revenues have still been tanking. This is largely due to extensive travel restrictions between the island of Macau and mainland China. While these restrictions are starting to ease, the sector is expected to take some time to recover. 

gross gaming revenue in the region fell by 94.5% year-on-year in August

Tourist arrivals to Macau rose by a multiple of three between July and August; visitor numbers were in the region of 210,000 and 230,000 last month. Still, gross gaming revenue in the region fell by 94.5% year-on-year in August, only reaching $166.6m. This indicated a further 1% drop from July’s figures.

For the first eight months of the year, revenue plummeted 81.6% in comparison to 2019. JP Morgan analysts have labeled August’s results “a bit disappointing” and “somewhat puzzling”.