GGRAsia – Govt silence on Macau gaming concessions a concern: Telsey

Govt silence on Macau gaming concessions a concern: Telsey

Nov 21, 2018 Newsdesk Latest News, Macau, Top of the deck

U.S.-based brokerage Telsey Advisory Group LLC has voiced its concerns about the lack of clarity surrounding the Macau government’s plans for what will happen in the run up to when the licences of the six current Macau casino operators expire.

A Telsey Advisory Group note issued on Tuesday pointed out that Macau chief executive Fernando Chui Sai On delivered his annual policy address last week but gave no indication about what would happen when gaming concessions come up for renewal in 2020 and 2022.

The first two casino licences to expire, namely in 2020, are those held respectively by SJM Holdings Ltd and MGM China Holdings Ltd.

“We are… becoming more and more concerned over the lack of news surrounding gaming concession renewals,” Telsey Advisory Group’s Brian McGill and Alec Cummings wrote.

“In last year’s policy address, Mr Chui had suggested that mid-2018 would be an appropriate time to address this issue,” the note added. “Moreover, last year the Macau government commissioned two studies on the gaming industry concession renewals, both of which were expected to be completed by the third quarter of 2018.

“We are obviously not in the third quarter anymore, and we are well past ‘mid-2018′. Given this, and considering the current geopolitical tensions between the United States and China, we are watching this situation closely.”

The Macau government has commissioned at least two studies on the possible development of the city’s gaming sector in the period between 2020 and 2030. The Economic Bureau confirmed the ongoing research after questioning from GGRAsia in December last year. There has been no update on their status.

At the press conference following his policy address, Mr Chui was asked about the casino licence refreshment process at least twice. He did not offer clarity.

“Before the licences expire by 2022, we will be launching the tender process,” he said at last week’s conference. “Regarding those licences that expire two years earlier [2020], we’re studying how to deal with it. There is still some time to go before 2020 and 2022. We will inform the public about this matter in an open and transparent manner.”

Meanwhile, Telsey Advisory Group said its latest channel checks indicated that gross gaming revenue (GGR) in Macau casinos would be 3 percent or 4 percent higher this month than a year ago, even though this month had one more Friday than last November.

The Telsey Advisory Group note said Macau casino GGR in the first 10 months of this year was 14.3 percent greater than in the corresponding period last year, but that the annual rate of growth had slowed markedly in the past couple of months, to 2.8 percent in September and 2.6 percent in October.

The brokerage suggested November GGR could have been impacted by the annual Macau Grand Prix, which usually increases the number of visitors to Macau but limits the amount of money bet in casinos, because the motor racing fans take up seats on transport in an out of the city that would otherwise be filled by gamblers. The 2018 edition of the Macau Grand Prix took place from November 15 to 18.