Uncertainty surrounds Macau casino permits

Investment analysts say the future it’s not clear for the gaming permits of Macau’s six casinos, which expire between 2020 and 2022.

Macau.- According to several investment analysts, nothing but uncertainty surrounds the future of the licenses held by Macau’s six casino operators, which are due between 2020 and 2022. Comments surged after the city’s Secretary of Economy and Finance Lionel Leong Vai Tac said that the government analyses various options regarding the licensing issue.

Secretary Leong commented that Macau officials are assessing several possibilities in order to extend the gaming concessions and sub-concessions. As reported by GGRAsia, the current terms and conditions, which state that permits can be extended in increments of time to a maximum of five years (after that, the concession process must be renewed), could even be amended.

“The government will most certainly run some form of a request for proposal process with criteria that will make existing concessionaires the evident winners of new concessions (effectively renewals), but likely under new terms, with a potential for economic costs,” Sanford Bernstein analysts said.

“Relevant Macau law says that any extension to the current concessions and sub-concessions could be accompanied by a change in terms and conditions,” explains the media outlet. That being said, new bids for concessions could mean a chanche in the terms of said concessions and, according to Sanford Bernstein, there’s a possible scenario with “higher taxes” and probable “fees up front or payable over time.”

“A higher tax on mass could be imposed, which would not necessarily have an impact on GGR generation (and such a bifurcated tax rate already exists in some other jurisdictions around Asia),” analysts explained.