Longtime industry expert Warwick Bartlett spoke with Focus Gaming News about the outcome of Macau’s concession retender.
Exclusive interview.- A week ago, the government committee overseeing Macau’s casino licence retender awarded new 10-year licences to all six of Macau’s current casino operators. With the new licences to begin in January, Focus Gaming New caught up with veteran industry analyst Warwick Bartlett to consider the future of the “Las Vegas of Asia”.
Macau has decided to extend the licences of the six current casino operators. What are your first thoughts?
The first impression is business as usual. It is somewhat like a lottery renewal where the incumbent licensee seems to retain their licence. There is good reason for that, the jurisdiction is used to dealing with the licence holder, they have performed well during the term, and change brings the risk of the unknown.
GMM Limited, the company linked to Lim Kok Thay, chairman of Genting Group, did not win a concession despite a proven track record. Why do you think authorities made this decision?
I have no idea, as you say Genting is a well-run company. It could be that the existing operators are nursing substantial losses due to Covid-19 restrictions and the authorities think it only fair they should be able to recoup those losses.
What changes will the casino industry see in the short term in line with Macau’s new gambling law and new concessions?
The operators have been incentivised to attract visitation from other markets, but if they are too successful this could bring forth competition from other jurisdictions when they see their own tourist industry under threat. I think there is going to be much closer scrutiny on how operators conduct their business. The junket model while bringing great riches to Macau was also responsible for some lax behaviour that received Beijing’s notice.
It seems Macau aims to cast off its reputation as a city for gambling. Is this possible?
The idea is to spread the entertainment proposition to that Macau becomes an all-encompassing resort attractive to all of the population. But like Vegas, the profits come from gambling. It is gambling that enables investment in other leisure activities.
How do you see the gaming industry in the region in the coming years?
It will continue to grow, slower at first due to the major headwinds faced by the global economy, and the uncertainty in relations with major trading partners. However, I have always said recessions, slowdowns, whatever you want to call it, bring forth new legislation that will increase taxes for hard-pressed governments. The moment we see interest rates start to stabilise along with inflation, new opportunities will arise – and in the most unlikely places.