Macau's casino operators could have concessions in place ahead of schedule

The Macau government released on Thursday, December 23, far ahead of the six-month deadline, a summary report from a recent public consultation regarding proposed changes to the city's gaming regulatory system. The quick release of the report indicates it may be possible for bidding to open a public tender on a new public contract before the six current gaming licenses expire June 2022, according to a Friday note from JP Morgan Securities Asia Pacific Ltd.

JP Morgan stated that the final report on the consultation, which was concluded in late October, was "well before" the six-month deadline by which the city government had been required to produce a report after a public consultation period.

This suggests that the government is keen to retender licenses before the expiry on June 26 of next year of the existing gaming concessions and sub-concessions. Analysts Livy Liu and Amanda Cheng also agreed.

According to local authorities, the gaming law of the city must be amended before any public tender can take place. The revised bill will be submitted by the government to the Legislative Assembly. This will open the door to a public tender process for next year.

"We now believe licence retendering - in the form public bidding - could open within first-half 2022, and that it is no longer impossible for new licences to be issued before expiry" of existing ones, the analysts asserted.

Separately, brokerage Sanford C. Bernstein Ltd analysts stated in a Thursday note, "We still believe the government is wholly set on finalising the new concessions prior the June expirations."

Analysts Vitaly Umansky and Kelsey Zhu emphasized that they didn't see anything in Macau's published report that would be cause for concern.

Morgan Stanley analysts Praveen Choudhary, Gareth Leung and Thomas Allen stated that the Thursday memo on the subject provided needed clarity. However, they stated that the public supported "increased oversight" of the industry based upon the feedback from the consultation.

Morgan Stanley also stated that the 97.6% support of those sharing their views about the city's casino sector's development of nongaming, "could have a return dilutive" to the industry.

JP Morgan noted that much of the public that expressed an opinion thought that the number of operators should remain at six. It was supported by 44% of the 217 opinions. 16.6% preferred more than six operators, while 29.5% had no opinion or were neutral.

The institution stated that the government's words also suggest this to be true. In other words, it continues to reiterate the importance of balancing stability and a healthy development of the gaming industry.

Image source: Unsplash.com