Macau casinos must hold US$620m in capital during concession period

After analysing the final draft of Macau’s general gaming law amendment, JP Morgan has deduced that casino operators must have capital of MOP5bn (US$620m) during the entire concession.

Macau.- Analysts continue to scrutinise the final draft of Macau’s new gaming law. JP Morgan has noted that article 17 of the law that establishes a minimum share capital requirement for any local casino concessionaire of MOP5bn (US$620m).

Analysts pointed out that operators will need to prepare MOP5bn in cash – or deposits – and keep net asset value above MOP5 bn at all times during the concession period. According to JP Morgan, this is the reason for Wynn Macau’s agreement with its US parent company, Wynn Resorts Ltd, for a US$500m revolving loan facility.

Vote on Macau’s gaming law amendment bill to take place on June 21

A vote on the final draft of Macau’s gaming law is respected on June 21. The draft was approved by the Legislative Council’s second standing committee on June 15. It made several changes to the original draft, the most significant of which concerned tax hikes on gambling and the future of satellite casinos.

The new draft requires operators to pay a direct gaming tax of 35 per cent and a flat tax of 5 per cent for social welfare and urban development in Macau, an increase of 1 per cent from before. This 5 per cent indirect tax can be reduced if operators manage to attract more foreign players to their casinos.

Major changes also require any casinos operating in the city to be established on assets owned by gaming operators. However, authorities extended the original three-year grace period proposed to allow satellite casinos to resolve ownership issues.

Six-month casino contract extensions will be signed on June 23 to extend existing concessions pending a new tender.