Feature: Macau Legislation
Meet the new rules, same as the old rules
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Sighs of relief greet the proposed second generation of casino concessions in Macao. By David McKee
fter much dropping of hints by City Hall and considerable fretful speculation on Wall Street, Macao’s government laid out its new regime for casino concessions in the enclave. They strongly resemble the status quo, leading to a palpable sense of relief across the financial world. Although the length of concessions will be halved—from 20 years to 10, with optional three-year renewals under exigent circumstances—six licenses will be maintained, with the sub-concession tier scrapped and all six operators given parity. Deutsche Bank analyst Carlo Santarelli called it “a decidedly favorable event, even if logically expected.” Added analysts for Jefferies Global Gaming, “There 38
were few surprises in the bill, which we consider benign, therefore removing a major overhang and providing incremental support for valuations.” “While there is little change to the current structure other than the shortened term, we noted the market sentiment was highly negative initially and was expecting drastic change. This development … should be a positive for valuations,” wrote Jefferies analysts. The current licensees aren’t completely out of the woods, as the June retendering process still awaits, meaning that one or more could get kicked out of town, although most financial analysts think this highly unlikely. As though aware of their precarious status, all six operators quickly lined up to serenade www.casinolifemagazine.com
