GGRAsia – Macau gaming law revision maybe only by 2022: JP Morgan

Macau gaming law revision maybe only by 2022: JP Morgan

Apr 21, 2020 Newsdesk Latest News, Macau, Top of the deck

A revision of Macau’s gaming law might not be completed until 2022, the same year that the present casino permits of the six current Macau operators are due to expire.

That is an analysis of JP Morgan Securities (Asia Pacific) Ltd in commentary on the Macau government’s policy address for 2020 given by the city’s leader Ho Iat Seng on Monday.

Chief Executive Mr Ho had told the city’s Legislative Assembly (pictured in a file photo) that the local government was planning to launch in the second half of this year a public consultation over the review of Macau’s existing gaming law. Once the gaming framework law was revised, a fresh public tender process would be launched for Macau gaming rights, which are currently held by six casino operators.

JP Morgan noted that were a consultation process to take place in the second half this year, the revised law would have to pass through the Legislative Assembly during 2021 “at the earliest, but 2022 is still possible in our view”, before a retender process could occur.

“Thus, we wouldn’t be surprised to see the renewal [rebidding] process postponed by a year or so versus the current expiry of June 2022,” wrote analysts DS Kim, Derek Choi and Jeremy An.

Banking group Nomura said in a note last week that due to the novel coronavirus pandemic, it might take until 2022 for Macau casino gross gaming revenue to recover to circa 90 percent of 2019 levels.

Macau’s existing gaming law includes the option of extending beyond June 2022 – up to a maximum of five years – the present gaming permits of the current operators. The length of each eventual extension would be decided by an incumbent chief executive.

The Chief Executive had also said on Monday that the city’s government would ask China’s central government to increase beyond the current 49 places, the number of cities covered by the Individual Visit Scheme (IVS), once the Covid-19 pandemic was controlled. That would represent the first such expansion in over a decade.

JP Morgan wondered whether such a move might represent a “long-awaited ‘gift’” from the central government “finally coming”.

Such a move would support the city’s gaming industry “in both symbolic… and practical ways,” suggested JP Morgan.

An aggregate of 39.41 million tourist arrivals was recorded in Macau in 2019. Visitors from the mainland accounted for 70.9 percent of the tally, i.e., 27.92 million arrivals. Of the visits by mainland Chinese, 13.07 million (or 46.8 percent) involved travel under the IVS system, according to official data from the Macau government.

Mr Ho noted additionally in a question-and-answer session with journalists after the Monday policy speech that there should be “more clarity” in 10 days – i.e. the end of April – regarding whether Macau could ease border restrictions. The city has had 12 consecutive days without a new report of Covid-19 infection.

Brokerage Sanford C. Bernstein noted in a Monday memo on Macau that across China as a whole, “travel restrictions have been softening,” and there was evidence of “business getting back to normal in China across many provinces”.