Macau To Alter Gaming Laws
After dealing with the repercussions of a dismal 2021 for Macau casinos, officials have proposed a new set of reforms to their gambling laws
After dealing with the repercussions of a dismal 2021 for Macau casinos, officials have proposed a new set of reforms to their gambling laws. Furthermore, an analyst has predicted that Macau in 2023 is set to gain back close to 80% of its 2019 revenue.
The Nitty GrittyIn a recent tweet, Pak Yiu, a correspondent for Nikkei Asia, tweeted the changes proposed to Macua’s gambling laws.
Should clarify the license is valid for 10 years with possible 3 year extension https://t.co/4DUf6akDmj— Pak Yiu (@pakwayne) January 14, 2022
The changes are as follows:
- One of the top priority for Macau’s casinos are national security,
- Six casino licenses for up to 10 years will be granted that prohibit sub concessions,
- The shareholding ratio of permanent Macau residents to be raised to 15%,
- Casinos and companies must meet the 5 billion pataca mark in capital in order to apply for a new license
The focus on national security is important, as Macau authorities had revealed their intentions not to increase national security. As a result, shares in Macau plunged. The focus on increasing national security in the operation of casinos will surely remedy that issue.
Another change for Macau gaming comes in the shape of shareholding requirements. Officials have proposed an increase in the Macau-based shareholding from 5% to 15%. Furthermore, rules for casino licenses have been laid out. The maximum number of licenses to be granted is six with the maximum length capped at ten years.
Refresh and RenewAs it stands, the licenses of the six casinos in Macau are set to expire late in June. The recent proposal indicates that it is these six casinos that will be able to apply for their new license once a re-tendering exercise is complete.
It is not confirmed when the re-tendering period will occur, however. It could come sometime in 2022, or an extension could be granted to the casinos. The minimum share capital for the concessionaires (or the concession granted to the casino) was also proposed to be increased from MOP $200 million, or US$24.94 million, to MOP$5 billion, or US$623 million.
The new reforms are the result of a 45-day deliberation and will soon go before Macau’s legislative body for approval.
A Bright Future PredictedAs was hinted earlier, Macau;s gaming industry was pummeled as a result of COVID which halted international travel for a period of time. Next year, Macau is predicted to reach levels close to 2019, when its industry was booming.
However, a member of Bernstein, a global management firm that provides research services to investors, has predicted a bright future for Macau gaming. Vitaly Umansky, an analyst for Bernstein, has predicted that the Macau gambling industry will rebound as a result of increased visitation and capacity increases.
Umansky predicted that in 2023, the gross gaming revenue in the Macau gambling industry could potentially reach 81% of its 2019 figures. He has also predicted that the total revenue could increase 15% on pre-COVID numbers.
This year should be good for Macau, too. Bernstein predicted the earnings before interest, taxes and depreciation will increase to close to 40% of 2019 numbers. This increase constitutes a 270% increase compared to last year. Further more, mass market revenue is predicted to reach 66% of its 2019 numbers.
Its clear these gaming reform laws will positively impact the industry. Only time will tell if the predictions were accurate.