Macau casino bidders reportedly told to increase investment in non-gaming

Seven operators have submitted bids for casino concessions.
Seven operators have submitted bids for casino concessions.

Analysts at Credit Suisse (Hong Kong) said the government has asked bidders for more investment in non-gaming projects than expected.

Macau.- Almost a month has passed since seven casino operators submitted their bids for new concessions under Macau’s retender process. Since then, authorities have held meetings with each of the bidders. Little has emerged about their content, but analysts at Credit Suisse (Hong Kong) suggest that the process is not as straightforward as operators may have hoped.

Analysts say ideas the government has rejected some ideas put forward by the bidders and is requesting higher investment in non-gaming projects. The government reportedly also wants operators to provide clear spending timetables.

Credit Suisse said bidders are currently preparing additional information for their meetings with the government’s committee but said: “We understand that most operators need to lift their committed investments.”

The agency noted that while its baseline scenario assumes that the six existing operators will maintain their licences for another 10 years, the terms of licence renewal are a risk to monitor. They said that an increased investment commitment will weigh on some operators’ already stretched balance sheets and reduce the industry’s long-term profit margins

The commission overseeing Macau’s casino retender has said that bids will be evaluated in accordance with the following factors:

  • The company’s proposal to expand tourist markets from foreign countries; 
  • Its experience in operating casinos or other relevant businesses; 
  • The benefits of their gaming and non-gaming investments; 
  • The company’s plans to manage its casino operations; 
  • Its monitoring and prevention of illegal casino activities recommendations; 
  • Its commitment to corporate social responsibility activities.

In September, Macau reiterated its aim to have the results of the retender ready in time to issue new licences by the end of the year.

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