Event: on December 23, the Macao SAR government issued a public consultation summary report on Revising the legal system for lucky gambling in casinos. During the consultation period, the MSAR government collected 417 opinions and suggestions from various channels.
The number of lucky gambling grants for operating casinos has attracted the highest attention, and it is generally believed that six should be maintained
In this collection of opinions, it is believed that the number of lucky gambling grants for operating casinos should be 6, accounting for the highest, 43.8%. Some opinions reflect that less than six grants may have a great impact on the society, especially the instability of the employment of employees in the gambling industry. On the other hand, I hope the SAR government will not only take into account the healthy and sustainable development of the gambling industry, but also consider the affordability of Macao's land and human resources to avoid adverse competition. The government responded that maintaining a certain scale of the gambling industry is an important basis for ensuring social stability and residents' employment. It can also ensure stable tax revenue, balance the overall expenditure of the SAR government, and provide favorable and stable conditions for maintaining people's livelihood and welfare and carrying out various social construction. The SAR government will comprehensively consider collecting opinions and formulate an appropriate number of grants in combination with factors such as social policy direction and economic environment.
The granting period is generally considered to be 20 years as the upper limit, and the statutory minimum capital of the company to be granted is increased
According to the opinions collected this time, 42.1% of the gambling operation rights were granted for less than 20 years, and 32.8% were maintained for 20 years. It is generally believed that the upper limit is 20 years. The government responded that considering that the future development focus of the gambling industry is to improve the quality and promote the diversified and healthy development of Macao's industry, shortening the grant period can give the Macao SAR more space to respond to the development trends and policies, make the most appropriate and timely adjustments to the gambling industry, and ensure the competitiveness of the gambling industry. In formulating the grant period, we will consider and balance factors such as the stability of the job market, the return time required for investors' business development, and the needs of industry development. In terms of increasing the statutory requirements for the supervision of the approved companies, raising the statutory minimum capital of the approved companies has been unanimously agreed in the opinions collected, and the specific amount will be formulated by the SAR government after comprehensive consideration.
It is suggested to strengthen the review mechanism of gambling intermediaries and focus on promoting the construction of non gambling projects
It is generally agreed that it is necessary to expand the scope of review and management of approved companies, gambling intermediaries and partners, and strengthen the review mechanism, mainly including clearly setting review standards, establishing capital and operation monitoring mechanism, cracking down on cross-border gambling, strengthening the supervision of lending and financing activities, etc. The government also said that it would attach importance to the qualification examination of all entities participating in gambling activities and strictly ensure the healthy and orderly development of the gambling industry. In terms of non gambling projects, the overwhelming majority agreed that the approving company should promote the implementation of non gambling element projects. The SAR government also said that it attaches great importance to the all-round development of Macao. The gambling industry should lead and cultivate new economic growth points through its own advantages, help the rise of sports tourism and cultural tourism, support the introduction of gambling related manufacturing industries in Macao, explore emerging industries, hold various international or well-known events and competitions, and strengthen the diversified development of Macao's industries.
We think, Macao's gambling industry has made important contributions to the protection of government taxes (the gambling industry contributed 80% of the tax revenue in 2019) and contributed a lot of employment opportunities to Macao. Combined with the contents of the gambling law consultation summary report, we believe that the number of lucky gambling grants in Macao will probably remain at 6 in the future, but the supervision of intermediaries will become stricter, which may affect the development of VIP business. In the follow-up, with the gradual control of the epidemic, the customs clearance in Macao will be liberalized, and the fundamentals of various gambling enterprises will be improved We hope to continue to improve, benefit the industry leaders, especially the company focusing on midfield business, actively expand non gambling business and practice the integration of Qin and Macao.
Suggestions: galaxy entertainment, sands China, SJM holdings, Wynn Macau, MGM China, Melco International Development
Risk warning: repeated epidemic risk; Risk of increased competition; Policy risk.
