Shares in Macau casino operators jumped today after the region’s government confirmed all six incumbent operators would have their licences renewed for a further 10 years.
Wynn Resorts Macau, MGM China, Sands China, SJM Holdings, Galaxy Entertainment and Melco International Development all saw their valuations increase off the back of the news.
In September, the six companies above – in addition to Genting Malaysia, which did not previously hold a licence in Macau – submitted bids to be awarded one of six licences to operate casinos in the region, beginning 2023.
It was announced on Saturday (26 November) that the six incumbents would have their licences renewed for a 10-year period, while Genting’s attempt to secure approval was rejected.
Wynn Macau saw the largest share price rally of all the approved operators, as shares traded some 15.1% higher when the market opened on Monday (28 November).
Shares in MGM China jumped 13.1%, while Sands China, Melco International Development and SJM Holdings saw their share prices increase by 8.4%, 8.2% and 7%, respectively. Shares in Galaxy Entertainment Group rose by just 0.5%.
Sands China chairman and CEO Robert Goldstein: “In the coming decade and beyond, we will remain steadfast in our strategy of continuous investment in Macau – in its economy, its people and its community.”
The six successful bidders will now negotiate with Macau’s government to finalise the terms of their new agreements, which are expected to be signed before the end of 2022 and become effective in January under a new gambling law in the region.
Several of the licensees expressed their gratitude and continued dedication to the region of Macau in response to the news.
“Our commitment to Macau has never wavered and we are honoured to continue the partnership we began with the government and people of Macau 20 years ago,” said Sands China chairman and CEO Robert Goldstein.
“In the coming decade and beyond, we will remain steadfast in our strategy of continuous investment in Macau – in its economy, its people and its community. Macau’s future as an international tourism destination remains bright and we look forward to furthering our leadership role in helping it reach its full potential.”
Macau’s casino sector has faced one hurdle after another since the onset of the Covid-19 pandemic in 2020.
With widespread restrictions on travel and hospitality, operators in the region have taken several successive quarters of financial strain as visitor numbers to properties have remained historically low.
For the most part, share prices of operators in the region remain at least 50% below pre-pandemic prices.