Asian Gambling Hub to Restrict New Gambling Licenses in Macau
Last Friday, gambling authorities in Macau shared their plans for the near future. Some bad news for the local casinos – the duration of all upcoming gambling licenses will be shortened. From now on, such licenses will last for only ten years. The last time, it was twenty years, so the casinos will feel the difference.
Before that, officials shared that they planned to repair the gambling sector last Fall. That is why the tension in the Chinese area’s casino industry has been high for a while. Anyway, the situation finally got more-or-less clear last week. The six industry leaders were informed on what to expect from Macau’s Executive Council. By no means, gambling activities should cause risks for China’s national security. That is one of the major rules.
Officials reported that authorities would propose 6 licenses for no longer than thirteen years by public tender. In June, all twenty-year casino licenses will expire, and new ones will have to follow new rules.
Investors had feared that the stocks of casino providers from the United States would go down in case the number of licenses was decreased. However, those stocks impressed the Asian community by showing positive share growth. For instance, FTimes informs, MGM China showed a growth of 11%, while Wynn Macau demonstrated a 9% growth.
As mentioned before, there are 6 huge gambling operators in Macau today. Most of the city’s most active gamblers will probably remain in the single Chinese city that has legalized casinos.
Why Many Choose to Gamble in Macau?
Before the updates, many gambling industry players worried about the possibility of increased taxes. However, it did not happen in Macau. Moreover, in some cases, it is possible to extend concessions by as much as three years.
From now on, Macau residents will have to possess at least 15% of the stock capital of the casino license owner, up from 10%. This novelty will most certainly pass through the city’s rubber-stamp legislature. It will not influence Hong Kong’s shares of providers.
We would like to remind you that casino activities are only allowed in Macau if we consider the entire country. It could make higher profits in just one week than Las Vegas makes in one month before the global lockdown.
After the officials opened five more rivals to the existing monopoly, the gambling industry exploded into a 24 billion dollars market. It happened in 2002. The local operations often account for roughly 80% of government income. At the beginning of 2021, more than 82,000 employees were involved in the gambling industry in Macau.
The new law has dragged on the stocks of gambling providers that are still suffering from a severe downturn caused by the pandemic. The latest rules indeed offer some clarity in the short term. Still, there is no guarantee that the industry will return to its heyday in the near future.