An odd man out
Malaysian billionaire Lim Kok Thay, chairman of Malaysia’s Genting Group, was confirmed as a bidder for a Macau casino license.
raises doubt that all of the incumbent license holders will return
Thay was the seventh candidate to enter the fold ahead of the Wednesday night deadline. There are only six license spots up for grabs, which raises doubt that all of the incumbent license holders will return to the market.
A company called GMM Limited, led by Thay, submitted the bid just hours before the window closed at 5:45pm. local time. A representative from GMM confirmed the company is aligned with Genting, according to TDM, Macau’s public services broadcaster.
Interest in Macau
Aside from the obvious mathematical inequation, there is serious concern amongst industry experts that Thay could steal a license from an existing operator.
Genting has a ton of financial clout to help push the envelope on its new project. The company did not provide any comments on its application.
The six existing concessionaires— Wynn Macau, Galaxy Entertainment, SJM Holdings, Melco Entertainment, and MGM China— all submitted applications before GMM’s shocking entrance. Wynn was the first to publicly announce its submission just one day prior to the deadline.
Ben Lee of iGamiX, a consultancy company in the gaming industry focused on Asia, was not surprised by the billionaire’s application.
of all the gaming companies in the world, they are the only truly global gaming operator”
“Genting was always interested in Macau,” said Lee. “Of all the gaming companies in the world, they are the only truly global gaming operator, with footprints in Malaysia, Singapore, Philippines, the UK, US, Bahamas and the high seas.”
Lee also foretold of Genting’s potential dominance within the space, after the company failed to make it into the American market.
“If there was a newcomer whom any of the existing concessionaires would fear, it would be Genting as Genting is the only one with a successful track record in developing and running theme parks, and willing and able to invest significantly in non-gaming,” said Lee.
Rules for applicants
Macau established the rules for license bidding back in June. Among other stipulations, candidates had to present plans for developing tourism, the upside of gaming-related and unrelated investment in Macau, and company responsibilities that they would establish and uphold.
All six current operators’ licenses will expire at the end of the year.
The six concessions will run for ten years before applications once again open, at which time there could be more spots, depending on the state of the market. All six current operators’ licenses will expire at the end of the year.
It was not surprising that the six current operators all reapplied for licenses, according to Lee.
“They already have their foot in the game and they already have sunk costs. It would be unprecedented for them to pull out right now,” said Lee.
The onus is now on the government to decide which applicants to select for the licenses. That decision will come by the end of the year, though there is no concrete announcement date.
Earlier this year, officials significantly upped the stakes for concessionaires. Each company was required to have a minimum capital of 5bn patacas ($618.9m), up from the previous 200m patacas ($24.8m). In addition, the managing director needed to be a permanent Macau resident with at least 15% of the capital in the operation.