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Gambling in Macau: Genting forces bigger investment from the “Big Six”

Nelson MouraNelson Moura

The bet on continuity and stability of local employment were decisive in awarding the new licenses to the six current operators. The seventh competitor will have served to “scare” the others into committing to a high extra investment

As in Giuseppe Lampedusa’s famous phrase, everything must change so that everything stays as it is. After an expedited tender process, Macau authorities have awarded provisional concessions to the original six gaming operators: MGM, Galaxy, Venetian (Sands China), Melco, Wynn and SJM.

Also read: Macau government promises to regulate jobs with reduced gambling

The final concessions will be awarded and contracts signed by the end of the year, with the new concessions starting on January 1, 2023.

GMM Limited was left out, the “card out of the deck”, which surprised with its unexpected candidacy. The application linked to the chairman of the Genting Malaysia gaming and tourism group, Lim Kok Thay, received the lowest score of the seven candidates, in an evaluation with point criteria never fully clarified by the evaluation committee.


The stability of local employment, the increased attractiveness of the city for foreign tourists and gamblers, and the development of non-gambling offerings were named as the three main criteria in the final evaluation by the authorities, but with no clear definition to be revealed as to their respective percentage weight.

According to the chairman of the bid evaluation committee, André Cheong Weng Chon, GMM Limited had been incorporated very recently in Macau and had no experience in the local gaming industry.

“We do not know the legal basis (?) for the decision, so we cannot comment on that. But we can disagree that the current problems – especially the security of existing employment and personnel – justify Genting’s refusal,” says Carlos Lobo, a lawyer and consultant in the area of gambling, in a publication.

Also read: Macau may end up with US$800 million gambling losses

“If the labor context was an issue, then the tender should have been postponed (or the term of existing concessions extended) for GMM to have the opportunity to compete on equal terms. The Commission could have done better (…) in communicating with the population and investors,” he adds.


However, in Alidad Tash’s opinion, the application really ended up messing up the accounts of the other operators, and was used by the authorities as a trump card to increase investment amounts.

The analyst believes that the local authorities used the unexpected application as a “scarecrow,” without which they would not have been able to “scare” the current concessionaires into committing to the desired investment levels.

Also read: Macau loses over 70 billion patacas in gambling tax by October

“Genting ultimately failed to win a gambling concession in Macau, but its bid ended up costing the six existing license holders billions of dollars,” comments the CEO of gambling specialist 2NT8.

“The Macau government masterfully exploited the threat of Genting taking over one of the concessions and forced the current six operators to financially commit US$12.5 billion in non-gaming expenditures over the next ten years.”

At the press conference where he announced the new concessions, Cheong said that it is “not yet the right time” to disclose the amount of investment pledged by each winning bidder, as well as the details of their non-gaming projects, exact plans to attract foreign travelers, and the annual fees to be paid to the government before the new concessions are official.

The official indicated only that all new concessionaires proposed detailed action plans, such as the annual investments they would make in the local market.

Read also: Macau rules out wage reductions and layoffs in casinos

Investment bank Credit Suisse AG recently indicated that the Macau government is said to have required each new gaming concessionaire to invest between 10 and 20 billion Hong Kong dollars in non-gaming elements over the next 10 years.

Between Galaxy and Sands China alone, they are expected to fork over MOP20 billion each, with the remaining four operators expected to fork out around MOP15 billion each.

An arduous task considering that the six concessionaires have accumulated unprecedented losses since 2020 due to falling visitor numbers following several outbreaks in Macau and the mainland, as well as the imposition of Covid-19 prevention and control measures, including casino closures.


Researcher Jorge Godinho believes that given the huge development of the gaming industry in the Macau SAR over the past 20 years, there was no room for another major expansion.

“Theoretically there could have been room, i.e. land, for one more concession, but it was decided to keep the number of concessions at six. In that context, unsurprisingly, the same six concessionaires won,” indicated the associate professor at ISMAT, Algarve, Portugal, and visiting professor of gaming law and criminal law at the University of Macau Law School.

Read also: Macau government launches regulation that establishes rules for gambling tender

The academic recalls that the public tenders of 1961 and 2001 were moments of great transformation for the sector, with STDM replacing the then incumbent Tai Heng in 1961 and the consequent liberalization in 2001, which led to three concessions and three sub-concessions.

“In 1961 and 2001, the goal was to expand. In contrast, the 2022 process aimed mainly at increasing diversification and non-gambling, correcting some of the excesses of previous years,” a publication indicates.

Shortly before the announcement of the new concessions, the Secretary for Economy and Finance, Lei Wai Nong, stressed the need for Macau to change its image as a gambling city, stating that the next ten years will be a turning point, for the non-gambling sector to become another major pillar of the city’s economy.

Read also: Pandemic reveals Macau’s gambling dependency, says Ho Iat Seng

For Jorge Godinho, the local gaming industry has clearly turned a new page, but it has not started an entirely new chapter.

“The next few years will be mainly a continuation of what started in 2001. The six concessionaires have well-oiled systems and are now expected to develop non-gaming activities much more than they used to. They are also expected not to rely as much, or at all, on the business brought in by gaming promoters and to rely mainly on the mass market,” he considers.

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