MACAU BUSINESS
“All these seven bidders all have their own unique
advantages… It’s possible that some of them might form a partnership,
resulting in a situation that every party is happy,” said gaming scholar Davis Fong
“Could a scenario appear in which Macau
awards a gaming licence to GMM, while the non-gaming businesses at that IR (hotels, malls, entertainment) remain with an incumbent? We think such a combo would prove extremely difficult to operate,”
says brokerage Citigroup Partnership with incumbent
Brokerage Sanford C. Bernstein is also not optimistic about the odds of the Malaysian tycoon’s firm winning a Macau licence and remarks that its possible entry to the Macau market is to partner with one of the six incumbents. “We believe Genting is positioning itself as a prospective partner or buyer of an existing operator in the event that a concession holder experiences financial difficulties and may require a partner or could be open to being acquired, with government consent,” the investment bank says. In a recent talk show about the new gaming tender,
Davis Fong Ka Chio, a local gaming scholar and former government-appointed legislator, also flagged about the possibility of Genting working with one of the incumbents. “All these seven bidders all have their own unique advantages… It’s possible that some of them might form a partnership, resulting in a situation that every party is happy,” the director of Institute for the Study of Commercial Gaming at the University of Macau said. Though it seems to be a tough battle, a few observers
believe Genting might emerge as a winner after its failed attempt two decades ago. In the liberalisation of the local casino industry in 2001-2002, Mr Lim submitted a bid under the name of Macau Star, S.A in the first public tender of gaming concessions. However, 20 years ago, the
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company finished sixth out of 21 bidders and was denied entry into the Macau market because the local authorities initially granted only three concessions, which later evolved into three concessions and three sub-concessions. “Macau may prefer the incumbents for their track record in helping local employment, but Genting Group has surprised the market previously by winning New York City and Singapore competitive bids,” said brokerage Morgan Stanley. Besides the flagship resorts under the brand of Resorts World in Malaysia and Singapore, Genting also operates casinos and resorts in the Philippines, New York, Las Vegas and the United Kingdom.
Ties with Beijing
In the perspective of iGamiX’s Mr Lee, the Malaysian conglomerate has a good shot in winning a licence. “One big advantage Genting has is its experience and willingness to invest in theme parks. Macau has talked that up in the past, and all the existing six operators—despite Galaxy [Entertainment Group] talking about it—walked away from the idea,” he says “Genting is the only one with the ability and the propensity to build and run a theme park.”
One of the major requirements for this new tender
process is that bidders have to demonstrate in their respective proposals the types of non-gaming offerings they would develop in the city and the ways for them to attract more overseas travellers to Macau. National security has also been a focus with the new gaming law—approved in June—giving power to the government to revoke a gaming licence in concerns of the matter. The background of Mr Lim, who is an ethnic Chinese, and his ties with Beijing might help Genting’s chance in the tender, edging out one of the three incumbents from the United States amid the geopolitical tensions between the U.S. and China. “In the most recent Winter Olympics held in Beijing, Genting was featured heavily in the local press with its ski resort that hosted one or a couple of the ski events in the Winter Olympics,” Mr Lee adds. Genting Resort Secret Garden, which is located in Zhangjiakou, Hebei province, staged the freestyle skiing and snowboard skiing events during the Beijing 2022 Winter Olympics. “This new concession tender is being very carefully managed, and only the parties that are deemed patriotic, sufficiently patriotic, will get the new concession,” the analyst concludes.
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