Macau ops detail annual ‘rent’ for gaming assets

Jan 02, 2023 Newsdesk Latest News, Macau, Top of the deck  

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Macau casino operators will each pay a fee of MOP750.00 (US$93.30) per square metre (10.8 sq feet) of their respective gaming assets – i.e., casinos and gaming equipment – in 2023, the first year of their new, 10-year concessions. Details of the annual rents to be paid to the Macau government were disclosed by the city’s six casino concessionaires in respective filings and press releases.

The annual fee for the second and third years will be based on the MOP750.00-amount, updated in accordance with the average consumer price index (CPI) in Macau, according to the documents.

The utilisation fee for the fourth year will increase to MOP2,500.00 per sq metre, with those for the subsequent years being updated using the preceding year’s fees as the base, plus an adjustment in line with the average CPI in Macau.

Under Macau’s legal system, the gaming assets of each concessionaire reverted to the Macau government – free of charge and without any encumbrances – at the end of the previous concessions, on December 31. Each operator had then to agree to pay an annual lease fee for the reverted gaming assets.

In a filing to the Hong Kong Stock Exchange, SJM Holdings Ltd said its unit holding a current Macau gaming concession, SJM Resorts Ltd, will “pay an annual utilisation fee” to the Macau government of approximately MOP69.0 million in 2023, subject to inflation adjustment in the subsequent period to 2025.

“From 2026 (i.e., the fourth year) onward, the annual utilisation fee will be adjusted to approximately MOP229.3 million,” subject to inflation adjustment from the fifth year until the end of the concession.

SJM Resorts will pay such annual utilisation fees for the gaming venues at Casino Grand Lisboa, Casino Grand Lisboa Palace, Casino Lisboa, and Casino Oceanus at Jai-Alai.

Melco Resorts and Entertainment Ltd will pay about MOP57.9 million for the first year of its new concession, based on the MOP750.0 per sq metre, according to a press release. Such amount would then be updated under the same terms for the remainder of the contract. The annual fees will be paid by Melco Resorts (Macau) Ltd, for the operations of respectively the Altira Casino, City of Dreams Casino, and Studio City Casino.

Galaxy Entertainment Group Ltd, MGM China Holdings Ltd, Sands China Ltd, and Wynn Macau Ltd, also detailed in their filings the same terms regarding the annual utilisation fees to be paid to the Macau government for their respective gaming assets. These companies however did not disclose in their filings either the annual amount that they will pay, or the aggregate area of their gaming space.

Galaxy Entertainment Group runs casinos at Galaxy Macau, StarWorld Hotel, and Broadway.

MGM China operates casinos at the MGM Macau property, on the city’s peninsula, and at the MGM Cotai complex.

Sands China operates casinos in its five properties: Sands Macao, The Venetian Macao, The Plaza Macao, The Parisian Macao, and The Londoner Macao. The firm said in its interim 2022 report, published in August, that the casino areas and supporting areas subject to reversion to the Macau government was approximately 136,000 sq metres in aggregate. That would mean that Sands China would pay a utilisation fee of about MOP102.0 million for the first year of its new concession.

Wynn Macau Ltd has casino operations at its Wynn Macau venue, on the city’s peninsula, and at the Wynn Palace property on Cotai.

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