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Genting Joins Macau License Race with Surprise Last-Minute Bid
By Jeff Osienya Sep 18, 2022 IndustryGenting joins the fray of companies seeking a Macau gaming license following an unexpected 11th-hour bid. While the six incumbents are better positioned to retain their licenses, Genting’s strong Chinese background make it a rock-solid contender.It’s official! There are now seven contenders for the soon-to-be-renewed gambling licenses in Macau, China’s Special Administrative Region (SAR). In a surprise move, GMM Ltd, a company linked to Genting Malaysia, tendered a bid to join the race to become a Macau gaming concessionaire. The company threw its hat in the ring only a few hours before the application window closed at 5:45 pm on Wednesday, September 14. GMM Ltd is managed by Genting Chairman Lim Kok Thay, a prominent businessman in the global gaming market.
If the bid by GMM is successful, this will change the narrative for the Macau gaming industry, which has only seen six major operators rule the scene for the last two decades. According to the SAR’s government website, all six current concessionaires, Sands China, Galaxy Entertainment, Melco Entertainment, Wynn Macau, SJM Holdings, and MGM China, have submitted their bids.
The submissions come amid what has turned out to be the most challenging time in the Macau gaming industry. Casino shares have been steadily declining over the past couple of months as 2022 has not exactly been a great year for operators in the renowned casino hub.
The year began with a series of challenges caused by the tightening of gaming rules by the government, which included travel restrictions and a crackdown on junkets. Then, to add to the woes experienced by the industry in the first half of the year, a fatal Covid-19 strain broke out. The new Covid-19 strain led to a 12-day lockdown that further devastated businesses across the region, with casinos being the worst hit.
A Worthy Competitor to the Big 6?
GMM’s interest in the license has created some level of uncertainty as the Genting Group is an established gaming operator with a worldwide presence. The current operators have already been bleeding financially from the unfavorable market conditions, and GMM’s challenge has undoubtedly caused a bit of uncertainty for the ‘Big 6’. Winning the bid is no longer a sure bet as had earlier been presumed.
Mrs. Chen, a GMM representative, submitted the two cartons of the original and copies of the required documents on Wednesday. During the submission, he reported that Mr. Lim Kok had intended to submit the application in person, but this was not possible because of the current Coronavirus crisis in the region. Chen added that the Genting Group was confident about the prospects of its bid because of its worldwide reputation. The other applicants were also optimistic with their respective submissions, citing their track records during the previous licensing period.
Galaxy Entertainment Group Vice Chairman Francis Lui Yiu Tung was among those who implied that their prior success is a criterion that should be considered when approving the bids. He said:
Quote“GEG has done a lot of work over the past 20 years and believes it has done a satisfactory job for Macau’s economy, people’s livelihood, investment and construction, and youth training.”
Lui Tung also noted that the post-pandemic clientele differed from the pre-pandemic demographic. As such, the company hopes to reel in visitors in the MICE and public entertainment categories.
MGM China Managing Director Pansy Ho Chiu King revealed that the drafting of the company’s bid had been in the works for about a year. He added that MGM’s success in the re-tendering process was a sure bet.
Meanwhile, Melco Resorts Chairman and CEO Lawrence Ho also spoke of his company’s odds of securing a license at the end of the year in a brief statement as follows:
Quote“I would like to thank the Macau government for this opportunity. Our proposal reinforces our commitment to Macau and the further diversification of its economy. We look forward to playing a leadership role in partnering with the Macau government to execute on the government’s vision.”
Analysts have also voiced their opinion on Genting’s possible entry into Macau as a concessionary. The majority have predicted that the chances may be slim for the company as the others have an established history which also affects the community in the territory. For instance, in a note on Wednesday, JPMorgan Chase & Co. analysts stated:
Quote“We think it’s unlikely for a government to choose a new foreign operator over incumbents, who have invested billions of dollars and employed local staff over two decades, including in an unprecedented downturn like this.”
However, IGamiX managing partner Ben Lee thinks that Lim’s influence as a Chinese native and his investments in the region may bode well for GMM. Some of his most notable investments include a ski resort that was instrumental during the Beijing Olympics.
Not the First Time Genting is Fighting for a Macau Gaming Ticket
Genting’s bid for a gaming license was utterly unexpected for several reasons. The main one is that the six concessions running the show have deep roots in the region, having served punters for the last 20 years.
Another notable reason is that after a difficult 2020, the Genting Group announced that it would be selling 50% of its stake in Genting Macau. Such a move from the company is an indicator of a possible exit plan from the Macau market altogether.
Nonetheless, the surprise bid is not Genting’s first attempt to attain a gaming license from the Macau government. Therefore, it will be interesting to see the outcome of this second attempt via GMM Ltd. While there’s no official date disclosed for when the concessionaires will be announced, it is widely expected to happen by the end of the year.
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