Macau Casino Retendering Rules Published in Chinese Gaming Enclave

Macau casino licenses for the six commercial gaming operators are set to expire at the end of the year. The local enclave government, following years of legislative deliberations, today unveiled the retendering conditions that will oversee the issuance of new operating privileges.

Macau casino tender application gambling China
Macau casino tender application gambling China
Macau’s Cotai Strip at night. Macau casino operators are learning what sort of conditions should complement their applications to receive new 10-year operating privileges in the Chinese gambling hub. (Image: Getty)

The Macau Special Administrative Region (SAR) Government today published Administrative Regulation No. 28/2022. The law sets the framework for reviewing applications from casino operators and granting those firms deemed suitable with new gaming concessions.

Macau isn’t expected to expand or restrict its current gaming industry, but to maintain the status quo. The six gaming concession holders — Sands, MGM, Wynn, Melco, Galaxy, and SJM — that have controlled what was the world’s richest gaming hub before the pandemic are each expected to receive fresh tenders. But their new operating licenses will be cut in half from their previous terms of 20 years to 10 years.

Review Process Detailed

Macau’s Administrative Regulation No. 28/2022 expects each of the six existing gaming operators to seek new licenses. But before those companies are awarded fresh tenders, the law requires that a suitability probe of each gaming giant’s key officials is completed. Any investor or firm maintaining a 5% or more equity position in the publicly traded firms will also be subjected to a fitness review.

Administrative Regulation No. 28/2022 allows eight or more bidders to submit applications for licensure, though it’s unclear if any company will participate since Macau leaders have made it quite known that the next 10-year market will be maintained by the six current concession holders. The gaming regulatory framework additionally requires that applicants be scrutinized for how they’ve operated in Macau in the past, and what sort of economic benefits allowing those companies to continue running casinos in the enclave would provide in the future.

Macau’s gaming application process will also task casinos with discussing what sort of gaming and non-gaming investments they foresee during the next 10 years. Bidders must also submit a casino management plan with their applications, as well as detailed tactics to safeguard their gaming floors from being targeted for illicit activities.

Finally, applicants will need to propose what sort of corporate social responsibility initiatives they intend to embark on during the forthcoming 10-year operating period.

2022 Timeline

The current licenses for Macau casino operators were originally to expire last month, but the SAR granted each licensee a six-month extension because of rulemaking impediments caused by COVID-19. Each casino company paid about $6 million for their extensions.

Macau officials expect to formally open the bidding in the coming weeks. Investment analysts focused on the region believe new licenses will be issued in November or December.

December 31 is a critical deadline, as Macau’s gaming law only allows for the SAR to extend gaming licenses one time. With that option already taken advantage of, come January 1, 2023, no company will be allowed to operate games of chance unless new licenses are granted by the local government.

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