MACAU BUSINESS
The Genting factor
Genting failed to secure a provisional concession, but the gaming giant led by Lim Kok Thay had a clear impact on the tender process. “The Macau government masterfully exploited the threat of Genting taking over an existing concession, and forced the current six companies to commit to US$12.5 billion in non-gaming spending in the next ten years”, said Alidad Tash, managing director of consultancy 2NT8 Ltd. Another gaming expert, managing partner of consultancy firm IGamix Ben Lee, notes that the exclusion of the only new bidder “will greatly disappoint Genting”, Ben Lee says, highlighting that the Malaysian giant is “possibly the only operator with the largest global and regional footprint as well as the only one with substantial non-gaming operations.” The tender programme requirements put forth by local authorities included a strong focus on a wide range of non-gaming activities and on the ability to lure customers from overseas markets. Genting “is very strong in non-gaming elements, particularly in theme parks”, underlined Ben Lee, pointing
All in on non-gaming Secretary for Economy and Finance Lei Wai Nong has pointed
out the need for Macau to change its reputation as a gambling city, saying that the next ten years would serve as a turning point for non-gaming to evolve into another major pillar of the city’s economy.
out the success of the Resorts World Sentosa theme park, where one of Singapore’s two casinos is located. In a note, investment bank JP Morgan said that even though Genting Malaysia lost to the six existing gaming companies, it might still think about a joint venture as a way to come back. In a recent note, analyst DS Kim said that GMM could
turn to an equity or joint venture investment if prices were “right” and they got permission from the local government.
The surprise bidder was ranked the lowest by the panel
of government officials responsible for the tender, due to a lack of experience in the local gaming industry. Tender Committee chairman André Cheong Weng Chun
was asked whether GMM could partner with any of the six gaming operators for the new concessions. Cheong did not directly comment on it, stating that it would be a “commercial decision” and that any major shareholding change in a gaming operator would require approval from the authorities.
At a Legislative Assembly (AL) plenary session where
lawmakers expressed concern over the future of the city’s gaming industry, the official said that gambling would have to make way for other sectors – such as MICE, culture, modern finance and Chinese medicine – industries that Macau has to pursue and develop in the long run at the behest of the country. “Non-gaming will have to become another field of economic
development in the next ten years. Non-gaming elements and gaming elements must come become two important economic pillars in the future,” said Lei. “Tourists used to perceive Macau as a gambling city because of the past 20 years of gaming development. What we need to change is Macau’s image as a gambling city, that’s why the SAR Government cares so much about non-gaming,” the secretary added. Lei’s remark came after the legislature’s president Kou Hoi In said that the city is still regarded by most mainland Chinese people as a gambling city. He asked what should be done by the government to bust the longstanding stereotype.
24 JANUARY 2023
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