GGRAsia – Bar on direct stake in rival Macau concession entity: bill

Bar on direct stake in rival Macau concession entity: bill

Jun 13, 2022 Newsdesk Latest News, Macau, Top of the deck

Macau-registered entities holding a local gaming concession, and shareholders owning 5 percent or more of such a company, would not be allowed to have any “direct” ownership of capital in a rival entity holding a Macau concession, according to the latest update to the city’s gaming law amendment bill, which cites the need to avoid “unfair” practices in the market. But an indirectly-held cross-stake – held via any entity, such as a fund – of fewer than 5 percent, will be permitted.

The bill doesn’t offer commentary on whether a listed company associated with a Macau concession entity would be able to hold such a cross-stake in a rival listed entity associated with another Macau concessionaire. Macau’s six concessionaires are respectively associated with firms listed either in Hong Kong, or the United States.

Veteran Macau legislator Chan Chak Mo gave the update on the cross-stake rule for actual concession entities following a closed-door meeting on Monday of a Legislative Assembly committee he heads that is tasked with scrutinising the gaming law amendment bill.

The latest update to the gaming law amendment bill also includes a ban on the actual Macau concession-holding entities getting their shares listed publicly, noted Mr Chan. The current gaming concession contracts also have such a condition.

Macau concession-holding entities as they exist currently have been formed specifically to meet a rule that the actual government-issued concession must be held by a Macau-registered business, rather than to operate the day-to-day functions of the underlying gaming and hospitality business associated with the concession.

Keeping the ‘no-listing’ rule for Macau concession entities should not have any impact on the normal business practice of the gaming concessionaires, Mr Chan added, citing government delegates’ remarks to his committee.

None of the current Macau casino firms listed either in Hong Kong or the United States directly owns its respective Macau licence. That is done via a Macau-registered affiliate.

A now-scrapped provision in the gaming law amendment bill had said that the firm actually holding the casino concession in Macau or its subsidiaries would – after getting approval from the city’s incumbent Chief Executive – only be allowed to have up to 30 percent of its shares listed publicly.

Legislators scrutinising the bill would sign off their concluding opinions on June 15, said Mr Chan in his Monday remarks. Following that, the bill is likely to get its second and final reading in the assembly next week at the earliest, he added.