Published on: September 30, 2022, 02:42 am.
Last updated: September 30, 2022, 02:55.
Earlier this month, Genting Malaysia stunned the gaming industry by entering the upcoming Macau bidding process.
While the update to the special administrative region’s (SAR) gambling laws makes room for six concessionaires – the current number operating there – Genting’s pursuit of a Macau casino license is seen as legitimate and something to be monitored by analysts and industry watchers.
For now, authorities on the Chinese mainland are not saying much beyond confirming that Genting’s application has been received and that it is in good standing. Through various subsidiaries, the Malaysian company has gaming interests throughout the Asia-Pacific region. But it was never operated in Macau. To do this, you should replace a current dealer.
The six are Galaxy Entertainment, Melco Resorts & Entertainment (NASDAQ: MLCO ), MGM China, Sands China, SJM Holdings and Wynn Macau. All these companies have submitted bids to renew their Macau licenses.
Genting Macau odds are legit
Immediately after Genting entered the Macau licensing fray, the prevailing wisdom among analysts was that the company was unlikely to usurp an established rival. But that view is softening.
They have a strong chance to topple one of the incumbents…and Genting would have been encouraged to enter. With their background, it makes a lot of sense.” said Ben Lee, founder of Macau-based gaming consultancy IGamiX, in an interview with Reuters.
Genting has the assets to back its Macau bid. Not only is the company financially sound, with ample access to capital markets, but it is a well-known Asia-Pacific operator with a trait Macau authorities crave: non-gaming prowess.
As just one example, Genting’s Resorts World Sentosa – one of two integrated resorts in Singapore – generated 35% of its 2019 sales from non-gaming businesses, while the best percentage of Macau operators in that year it was 20%, according to the data. Reuters.
If Genting is in, who’s out?
Assuming Genting’s Macau overture wins and an entrenched operator is displaced, there will be considerable debate over which company will be sent packing.
Some analysts believe it is too complex for Macau to replace an existing operator, no matter how compelling Genting’s proposal is. That fuels speculation Genting could enter SAR by investing in an existing, cash-strapped concessionaire. There is no confirmation on the matter yet, but the consensus seems to be that the company would be Grand Lisboa’s operator SJM Holdings.
Lee from IGamiX presented a more controversial idea in Reuters interview: Macao is dumping not one, but two US operators. This trio consists of MGM China, Sands China and Wynn Macau.
If Macau authorities were to take this stunning route, it would almost certainly heighten geopolitical tensions between the US and China, while confirming that at least two to four integrated resorts in the RAE would see a change in operational control. MGM China (two), Sands China (five) and Wynn Macau (two) combine to control nine casinos in Macau.