Casino group Genting Malaysia Bhd has not been preferred to replace veterans in the current Macau market through the city’s open bidding process due to practical issues, including what will happen to its existing non-game infrastructure, says a veteran industry observer with direct knowledge of Macau’s gaming sector.
The committee overseeing the city’s open bid to award a new 10-year casino concession announced a list of “temporary winners” on Saturday. Six incumbent casino concessions in Macau have seen each proposal chosen by the Commission.
The Commission said in a press briefing that the proposal of a Macau-registered corporation linked to Genting Malaysia was not included in the priority bid.
“Genting has always faced an uphill battle to kick out existing concessions,” David Green, founder of consultancy New Page Consulting Ltd and former gaming regulator in Australia, told GGRASIA in a commentary.
He is also a gaming adviser to the Macau government. Mr. Green is a member of the consulting team of accounting firm Arthur Andersen LLC, which was hired by the city government at the end of this century to advise on casino market liberalization.
He said, “The benefits of being in office cannot be overemphasized. It should be remembered that even if Getting presented a bid that was won in a different way, the concession relates to casino operations.
“[The Macau Government] will only grant ownership of casino sites and gaming equipment if the concession is terminated. This typically creates significant real-world obstacles to awarding concessions to new players, as hotels, retail, entertainment and non-game facilities associated with casinos are under the control of displaced casino concessions.”
Mr Green noted that all six incumbent casino operators in Macau were granted land rights by city authorities years ago to develop current large casino complexes that include hotels, restaurants, shops and other diverse attractions, as well as casinos.
Under Macau’s legal system, if one of the existing companies has not been granted a new casino license, it only needs to return game assets such as casinos and gaming equipment at each Macau resort to the Macau government. The remainder of each asset, i.e., all non-game locations, is still controlled by the expelled operator after the game license expires.
While announcing the results of Saturday’s bid, government representatives attending the event repeatedly stressed the need to ensure the “stability” of the urban gaming industry and the “safety protection” of Macau ID holders’ employment.
Samuel Yin Xiaoyang, an analyst at Maybank Investment Bank Bhd, told GGRAcia that feedback from Genting Malaysian investors was “not really disappointed” that the company missed its Macau license.
“They don’t see Macau turning that fast,” he added, referring to the sluggish performance of the urban gaming industry in recent years. “Malaysian investors still have a dim view of Macau
“I suspect that Genting may not have expected to gain concessions in itself, but rather that if an incumbent decides to become a real estate company by a limited gaming market or is forced to appear as a suitable prospective casino operations manager,” Mr Green told 파칭코
Door still open
Genting Malaysia has a casino monopoly in the domestic market through the resort world Genting complex, and also operates casinos in the United States, the Bahamas, the United Kingdom and Egypt. Genting Group also operates a casino resort in Singapore through Genting Singapore Inc.
Macau is one of the major gaming jurisdictions where genting companies do not exist. The group was also submitted in a Macau concession tender held at the beginning of this century, but was not selected.
Investment analysts and industry watchers have previously said they do not expect Genting Group to replace the current Macau market veteran in the open bidding process.
Investment bank JP Morgan Securities (Asia Pacific) said in a note released on Sunday that Genting Group “may still want to participate through equity/joint investments if the price is right and the government is OK” in Macau market.
JPMorgan added that the Macau government’s decision to retain its six incumbent employees was “great news.”