The proposed rules call for the removal of current sub-concession system, the appointment of government delegates to oversee gaming operators and the creation of an illegal deposit crime, according to a macaubusiness.com report.
In 2002, Macau granted only three gaming concessions. One each to: SJM Resorts, a subsidiary of SJM Holdings; Wynn Resorts (Macao), a subsidiary of Wynn Resorts; and Galaxy Casino, connected to Galaxy Entertainment Group.
Local authorities eventually allowed each concessionaire to have a sub-concession. They included MGM China Holdings, Melco Resorts and Entertainment and Sands China.
The current concessions expire in June 2022. They can be extended by up to five years. But industry watchers say they’re more likely to be extended by three years, since SJM and MGM have already had their concessions extended by two years to match up the expiry date of the other four concession holders.
Officials have not unveiled specific policies for review. But the number of future gaming concessions and their duration are in play. Authorities also propose more legal requirements for oversight of concessionaires, suitability evaluation, criminal responsibility and worker guarantees, among other things.
A public consultation for the new gaming law runs until Oct. 29.
Gambling makes up 80% of government revenues in Macau and 55.5% its GDP. Authorities are suggesting policies to reduce Macau’s economic dependance on gaming. They’re taking it a step further by saying that the gaming sector should take a leading role to drive that diversification.
Casino operators with a big presence in Macau took a major hit on the stock market today. Las Vegas Sands stock plunged 13% to 37.35 LVS stock had been rebounding from pandemic lows and testing its 50-day line before the news broke Tuesday and tanked the stock, according to MarketSmith chart analysis.
Wynn stock dropped 12% to 90.80 and below its 50-day line. Melco Resorts (MLCO) gapped down 7.6% to 11.72.
Meanwhile, MGM Resorts, which has less exposure to Macau, fell 4.5% top 41.16. MGM stock broke out past a 43.74 buy point from a cup-with-handle base intraday on Sept. 8. But the stock is now down more than 6% from that buy point.
U.S.-focused gaming firms retreated modestly.
Follow Adelia Cellini Linecker on Twitter @IBD_Adelia.
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