Malaysian casino group Genting was the dark horse to win a gaming licence in Macau 20 years ago. The Macanese government was preparing to call a halt on casino mogul Stanley Ho’s 40-year monopoly on the gambling business and three new licences were up for grabs. According to media reports in Hong Kong, Genting was sixth in the final shortlist but there was talk that the number of licences would be increased, giving it a chance of success.
What happened next came as a bitter disappointment to the Malaysian group, when the winning trio of Stanley Ho’s SJM, Wynn Resorts and Hong Kong-based Galaxy were allowed to sell three so-called ‘sub-concessions’ to Las Vegas Sands, MGM and Melco respectively.
The arrangement effectively expanded the number of gaming licences to six, but Genting didn’t feature.
Two decades on, Genting is trying to get into Macau again with a surprise last-minute bid for a casino licence, as the clock ticks towards the expiry of the current gaming licences this year.
After a lengthy period of public consultation, as well as a forceful crackdown on a few of the junkets in the city, the Macau government has decided to maintain the number of casino operators at six, while shortening the lifespan of the new licences to 10 years.
At the same time, unlike the format in 2002, the authorities haven’t signalled that they want to lower the barriers to entry to the gaming sector for newcomers.
For instance, there are no details on how land might be made available for sale to licence holders. It would take some time for any newcomer to secure a site and build a massive new resort in the enclave, cutting into the period that a new licence holder would need to break even.
That’s one of the main reasons why there were only six bidders – all the six incumbents – for the next generation of licences until Genting’s surprise submission.
Headed by Malaysian-Chinese billionaire Tan Sri Lim, Genting has gaming operations in Malaysia, Singapore, the US and the UK. It also boasts a track record in non-gaming businesses, including two of the largest theme parks in Southeast Asia. That could be an ace in the pack, as the Macau government has made diversification away from gambling into a key strategy for its tourism sector.
“They have a strong chance to topple one of the incumbents… and Genting would have been encouraged to come in. With their background it makes a lot of sense,” Ben Lee, founder of Macau gaming consultancy IGamiX, told Reuters.
Media outlets in Macau and Hong Kong reckon that the odds are still heavily against Genting making the breakthrough, however. “Why would the current six let go? They’ve done everything the government has asked them to do: they have properties, they have employees and they have 20 years of history,” a local gaming analyst told Macau Business Daily.
The outcome of the bidding process is likely to be announced next month.
Of course, losing out on a licence would be catastrophic for any of the incumbents. The current operators will also argue they deserve the chance of 10 more years in the enclave, as the casino sector finally shows signs of coming out of Covid-19 hibernation. Last month the territory’s government said that Chinese authorities would resume approvals of entry visas for mainland travellers from five regions including Guangdong and Shanghai. Group tours will also start to be permitted again in November.
For nearly three years the Macau government has implemented stringent quarantine controls on all tourist arrivals to contain the pandemic. The border between Macau and the mainland has stayed open, but traffic has been sluggish in the extreme. Mainland Chinese tourists have needed to book visa appointments followed by a weeklong application process.
Tourist arrivals, mainly from just across the border in Zhuhai, are now showing some early signs of life, averaging nearly 30,000 a day during the first three days of the National Day holiday this month, Hong Kong’s Ming Pao newspaper said. In comparison, Hong Kong welcomed a total of about 5,000 international visitors over the same period, despite the fact that quarantine upon arrival requirements were dropped in the city late last month.
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