After receiving their 10-year licenses, the six Macau casino companies pledged on Friday to invest a combined 118.8 billion patacas ($15 billion), with the majority of the funds going towards non-gaming endeavours.
Earlier, there was a speculation that the six companies receiving the new licenses will invest around 100 billion patacas ($12.4 billion).
The government of Macau signed contracts with six enterprises on Friday to renew their gaming licenses for the following ten years in the backdrop of loosening Covid-19 quarantine restrictions for incoming guests, including those from Hong Kong.
The concession agreements for the territory’s government were signed by Chief Executive Ho Iat-seng, Secretary for Administration and Justice Andre Cheong, and Secretary for Economy and Finance Lei Wai Nong, according to a live feed of the proceedings by Macau Daily News as reported by South China Morning Post.
The six incumbent operators secured license extensions, the authorities announced last month. A new player, Genting Malaysia, was also among the license seekers but failed to secure it.
The new contract period for the six companies, MGM China, Wynn Macau, Sands China, Galaxy Entertainment, Melco Resorts, and SJM Holdings will start on January 1, 2023.
According to Bloomberg, the casino shares have jumped by more than 60 percent in the last three weeks. Analysts believe that license renewals and the new lenient Covid-19 restrictions on tourists visiting Macau is one of the main reasons for this uplift.
Ben Lee, a managing partner at IGamiX Management & Consulting in Macau, said, “The lifting of some of Macau’s more onerous zero-Covid restrictions holds out some hope for the new concessionaires that next year will be better than this one.”
The director and head of global gaming research at Citi Research, George Choi said, “Assuming that the first group tour visas will resume after March 2023, gross gaming revenue (GGR) could start recovering from the second quarter next year onwards.”
