Macau retains previous licenses
For a long time it was unclear whether the for Macau granted licenses remain valid in the future. Now, to the relief of the gambling operators and also to the relief of the players, the positive news came that everything seems to be staying the same in Macau. At least this statement is true for some of Macau's gambling operators.
Reasons for the uncertainty in the gambling companies
There are some reasons why the gaming companies already based in Macau became insecure. For example, all current licenses expire in June of this year. Apparently, until the new public announcement, it was unclear whether the licenses would be extended and, above all, for how long. The new regulation, which will come into effect in June, confirms the insecurity of the gaming groups: Until now, gaming licenses had a duration of 20 years. Now thelicenses are only renewed for 10 years. A further extension is possible for a maximum of three years.
Apart from the term, there are other changes: From now on, 15 percent of all shares must be held by a business person who has lived in Macau for 15 years. Another uncertainty came to light as the following was announced in connection with the arrest of the Suncity CEO: China's government would likeMacau to become independent of gambling and instead create a tourist island again . The government has also announced that it will take action against the criminal activities of the junket operators in particular.
Not least, experts estimated a few weeks ago that China's politicians don't like it when players bring their money to Macau. It is possible that China wantsnew gambling laws to increase players' use of mainland casinos.
Six gaming companies can breathe a sigh of relief
After all the uncertainty of the past few months, six gaming companies can now celebrate:Sands, Wynn, MGM, Galaxy Entertainment, SJM and Melco. All of these corporations currently have alicense forgambling on Macau and may continue to operate it. Some of these are subsidiaries of the main US based companies. This is the case, for example, with Sands, Wynn and MGM, which only recently targeted Macau with a plan to strengthen their operations in Asia.
The stock exchange has already reacted to the positive news that Macau will remain the same as before due to the extension of the existing licenses. Moststocks are up about 20 percent after trading lower recently. However, due to another change, there is no guarantee that this will remain the case in the future: Cooperation with the junket operators is now prohibited.
VIP rooms must be closed
TheCooperation with the junket operators will be prohibited for all gambling groups from the effect of the new licenses . This means that casinos are no longer allowed to accept VIP guests that were previously generated via junket operators. The same applies to high rollers, who are also recruited via junket operators. The loss of these financially strong customers is also associated with a drop in sales. To what extent the more than 40 Macau-based casinos plan to compensate for this drop in revenue has not been disclosed.
The ban on collaborating with junket operators is linked to another regulation: all VIP rooms operated by the junket operators must also be closed. This again leads to a decline in sales - at least that's how experts see it. All of this is on top of the drop in sales caused by theSuncity closure has to be accepted: Here, too, the experts estimate that 25 percent of all sales generated in Macau can be traced back to Suncity.
The public statement from the casino experts at IGamiX Management and Consulting sums it up: Ben Lee doesn't expect Macau to be able to enjoy its old heyday again. The new gambling law with the restrictions would successfully prevent this. In addition, there arecontinued entry restrictions due to the corona pandemic.
Junket operators in government focus again
Of course, the ban on working with junket operators primarily has a negative impact on these companies. This type of company has been the focus of the Chinese government for more than a year: since March 2021organized gambling trips have been punished. In concrete terms, it means that no gambling trips may be offered outside the national borders. This means that junket operators can only operate within China. Anyone who does not comply with this must reckon with a prison sentence of up to ten years.
With these restrictions, the tax revenues directly related to the turnover of the casinos are also reduced. After all, the gaming companies based in Macau have to pay40 percent of the gross gaming revenue as taxes. This tax rate is retained even if the licenses are renewed.
Macau: Gambling region with the highest turnover in the world
Macau already surpassed Las Vegas a few years ago, at least in terms of stakes. However, this has resulted in this Chinese region now beingdependent on its own casinos. China's government wants to abolish this fact and convert the area back into a tourist area over time. Limiting licenses to six gaming corporations may be the first step in the right direction. Not only will they be happy about the selection of the corporations, but also the gambling fans. This preserves many of Macau's landmarks.
One of the best-known and most popular casinos on Macau is theVenetian Macao, which belongs to the Sands company. Located on the Cotai Strip, Venice has been recreated almost perfectly. Characteristic is not only the skyscraper in which the suites and hotel rooms are located. The bridge placed in front of the building was undoubtedly built in Venice style. Also not to be missed are MGM Macau and Wynn Macau. These buildings also rise high and cannot be overlooked. This look will be retained by gambling fans.