Macau's six casino operators sign new contracts
Macau's six incumbent casino firms signed new 10-year contracts on Friday to operate in the world's biggest gambling hub, after a lengthy bidding process that had threatened to end one company's run. Incumbent operators Sands China, Wynn Macau , Galaxy Entertainment, MGM China, Melco Resorts and SJM Holdings fended off a surprise bid from Malaysia's Genting to win the six licences on offer. The new contracts, which will come into effect on January 1, 2023, were signed at Macau's Government House on Friday by CEOs of the casino companies and the SAR's officials. Under the contracts, the operators are expected to focus on non-gaming activities in the new 10-year term, particularly as Beijing is keen for Macau to diversify away from gambling and attract more foreign tourists. Macau's government said the casino operators will invest a total of 118.8 billion Macau patacas  (US$14.82 billion) as part of their new bidding contracts. Previous attempts by the SAR to diversify have been unsuccessful, with casino operators shying away from investing in non-gaming due to the high costs involved, and the fact that such activities are far less lucrative. Macau's gaming industry currently accounts for more than 80 percent of government revenues. But the SAR's government set out conditions in the bidding for new licence holders to prioritise safeguarding local employment, develop the city's overseas tourism market and boost investment in non-gaming areas, including conferences and Chinese medicine. While the awarding of licences to the incumbents signals stability and continuity for the tens of thousands of local residents employed by them, executives and analysts say the six casino operators will face far greater accountability on non-gaming initiatives than in the last 20 years. "These projects will bring new players and tourists into the city, who in turn will spend sizable dollars on gambling," said DS Kim, analyst at JP Morgan in Hong Kong.Tourists from greater China, including Hong Kong and Taiwan, account for more than 90 percent of total visitation. (Reuters)