The fact the Macau government issued on Thursday, well ahead of a six-month timeline, a summary report of a recent public consultation on proposed changes to the city’s gaming regulatory framework, suggests it is feasible to open bidding on a new public tender before the six current gaming licences expire in June 2022, says a Friday note from JP Morgan Securities (Asia Pacific) Ltd.
The report on the consultation – a process concluded in late October – was “well ahead” of the six-month deadline that city’s government had to produce a report following a public consultation period, said JP Morgan.
This suggested the government’s “strong desire to conduct licence retendering before the expiry” on June 26 next year, of the current gaming concessions and sub-concessions, added analysts DS Kim, Amanda Cheng, and Livy Lyu.
The local authorities have said the city’s gaming law needs to be revised before such a public tender can occur. The government is now expected to submit a revised bill to the city’s Legislative Assembly, paving the way for a public tender process to take place next year.
“We now believe licence retendering – in the form public bidding – could open within first-half 2022, and that it is no longer impossible for new licences to be issued before expiry” of the current ones, added the institution.
Separately, brokerage Sanford C. Bernstein Ltd said in a Thursday memo: “We still believe the government is wholly set on finalising the new concessions prior the June expirations.”
Analysts Vitaly Umansky and Kelsey Zhu added, referring to the opinions from the public that were outlined in the summary of the consultation findings: “We do not view anything in the report that raises issues.”
The Morgan Stanley banking group stated in its Thursday memo on the topic, that “clarity on public opinion on key discussion points is positive”. Its analysts Praveen Choudhary, Gareth Leung, and Thomas Allen added: “We see status quo on number of licences (six), duration (between 10 to 20 years), tax (same as before) and dividend (allowed).”
Though they added that, based on the feedback from the consultation, there was public support for “increased oversight on operation” of the industry.
Morgan Stanley also noted that the 97.6 percent support among those sharing their views for further development of non-gaming by the city’s casino sector, “could be return dilutive” for the industry.
JP Morgan also observed that “much of the public” that gave an opinion, thought the number of operators should stay at six. That was supported in 44 percent of the 217 opinions submitted on that topic, with 16.6 percent preferring more than six, and 29.5 percent having no opinion or being neutral on the topic.
The institution stated: “The government’s wording also suggests this is likely to be the case – i.e., it keeps reiterating the importance of balancing the stability of the economy and the healthy development of the gaming industry.”
