Macau Casino Concessionaires Sign Contracts for the Next 10 Years
The six concessionaires that have been chosen to receive a gambling license from the Macau SAR government have signed their contracts pledging investment commitments for the next 10 years amounting to MOP 118.8 billion ($14.9 billion).
On December 16, Representatives of Galaxy Entertainment Group Ltd., MGM China Holdings Ltd., Sands China Ltd., Wynn Macau Ltd., Melco Resorts & Entertainment Ltd., and SJM Holdings Ltd. and the Macau authorities attended an official ceremony where they signed their license contracts for the next 10-year period. The official event was followed by press conferences from the Macau SAR government and all six concessionaires, providing details on the commitments the six companies made in the new agreements.
Non-gambling Investments Have the Highest Allocated Budget
The major portion of the committed investments is going to go toward the development of non-gaming projects and products. The total sum as per the contracts amounts to MOP 108.7 billion ($13.6 billion). These funds are going to be used for various so-called projects defined by the government during the application procedure: “International tourism”, “Entertainment”, “Sporting events”, “Art and culture”, “Health tourism” and so on.
The allocated investment toward gaming projects is quite modest, amounting to a mere MOP 10.1 billion ($1.26 billion) for the next 10-year period.
According to the contracts, Sands China will dig into its pockets the deepest with a commitment of MOP 30.2 billion ($3.8 billion) in total, Galaxy Entertainment is the runner-up with MOP 28.4 billion ($3.5 billion), while Melco is the most modest contributor among the six companies with MOP 11.8 billion ($1.5 billion).
Additional Commitments and Conditions in the New Concessionaire Contracts
The contracts, which come into force on January 1, 2023, include requirements not only in terms of the expected investments but other conditions as well.
There is a change in the issued capital requirement. If for the previous licensing period from 2002 to 2022 the concessionaires had to have a share capital of MOP 200 million ($24.9 million), under the new contracts that amount has been boosted to MOP 5 billion ($622.5 million). Another provision stipulates that the concessionaire’s managing director has to have at least 15% of the share capital to his name.
Concessionaires have new obligations in terms of loans. If any loans exceeding MOP 60 million ($7.5 million) are offered to third parties the Secretary of Economy and Finance has to be informed. If the loan is over MOP 100 million ($12.4 million) the Secretary has to approve it in advance.
Additionally, the contracts introduce strict rules on Corporate Social Responsibility (CSR) that intend to protect the staff of the casinos. The concessionaires are now expressly required to employ only Macau residents.
Each concessionaire will also be obliged to file its investment program for the next calendar year by September 30 of the previous calendar year.
Silvia has dabbled in all sorts of writing – from content writing for social media to movie scripts. She has a Bachelor's in Screenwriting and experience in marketing and producing documentary films. With her background as a customer support agent within the gambling industry, she brings valuable insight to the Gambling News writers’ team.
