Morgan Stanley: Macau casino concessions likely extended to 2025

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Morgan Stanley: Macau casino concessions likely extended to 2025

Investment bank Morgan Stanley said the Macau government will likely extend casino concessions for three more years, until 2025. It was previously announced the government was planning to hold open bidding for gaming licenses in June 2022, but due to challenges presented by COVID-19, the bidding might be pushed back. 

Casino concessions for SJM and MGM China were previously extended by 2 years in 2019, the extension cost each casino $25m as compensation for the government. The extensions can go up to 5 years in total; currently, the concessions are granted to six casinos (SJM, MGM China, Galaxy Entertainment, Sands China, Wynn Macau and Melco). 

Macau wants to revise its gaming law by 2021, which would mean new licenses will be given out according to renewed rules. But this schedule might face delays because the government will hold a public consultation process. Analysts at Morgan Stanley said: “For open bidding to happen, Macau has to run a public consultation (earlier planned for second half of 2020), and then put the new law in the Legislative Assembly (the draft is not ready yet), which could take more than a year.” 

It is likely the confirmation of government plans will take place in 2021: “Similar to March 2019 (a year before SJM/MGM’s licenses expired), we expect this decision to be taken by June 2021 – a year before the expiry date in June 2022.”

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