Macau gaming law is credit positive for gaming companies, analysts say

A first-reading debate and vote on the gaming law amendment bill will be held on Monday.
A first-reading debate and vote on the gaming law amendment bill will be held on Monday.

Analysts at Moody’s Investors Service Inc believe the bill will remove uncertainties for Macau casino operators and the future of the gaming industry.

Macau.- Macau’s gaming law amendment bill is “credit positive” for Macau gaming-related companies, according to a report from Moody’s Investors Service. That’s because the bill “removes significant regulatory uncertainty regarding the ‘extension’ of current existing licences, which expire on June 26 this year.

According to analysts, the bill puts an end to fears of substantially tighter regulations being imposed on the city’s six gaming concessionaires.

Under the new amendment bill, the concession period will be for a maximum of 10 years but can be extended for a further three years in exceptional circumstances. There would remain up to six concessions but the current sub-concession system would end.

Moody’s noted that a proposal made in a public consultation paper in September for casino concessionaires to require government endorsement before distributing profits, regardless of whether it be in cash or shares, did not appear in the draft bill.

Analysts stated: “Tighter restrictions on dividends would have reduced the financial flexibility of companies that rely on subsidiary dividends to service debt and interest payments.”

Macau’s Legislative Council will conduct its first reading of the gaming law amendment bill on January 24. All six Macau casino operators have shown support for amendments to the gaming regulatory framework.

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