HONG KONG – Malaysian group Genting has emerged as a strong contender to unseat an incumbent Macau casino operator for a new licence, analysts and executives say, unleashing possibly the biggest shakeup in the world’s largest gambling hub in over two decades.
Only six slots will be available for the seven applicants, Macau’s government has said, as Genting Malaysia goes head-to-head with the six concessionaires Sands China, Wynn Macau, Galaxy Entertainment, MGM China , Melco Resorts and SJM Holdings as their concessions expire at year-end.
Headed by Malaysian Chinese billionaire Lim Kok Thay, Genting has casinos globally including in Malaysia, Singapore, the United States and the UK. It does not currently operate in Macau.
The stakes are high for Macau and the six gaming firms, which have operated in the Chinese special administrative region since 2002.
If one of the incumbents lost their licence it’s likely to send tremors throughout Macau’s gambling industry as the companies have collectively invested more than US$50 billion (S$72 billion) in the past two decades, are tied closely to the economic fortunes of the former Portuguese colony and employ tens of thousands of people.
It would cause “far too much disruption” if any of the six operators were replaced, said Terry Ng, an analyst at Daiwa in Hong Kong, although other industry watchers note the incumbents have left themselves vulnerable to an operator like Genting which lost out on a Macau licence in 2002.
Genting’s strong non-gaming track record, including operating two of the largest theme parks in South-east Asia, would be a big draw for Beijing which has been urging Macau to diversify away from gambling and attract foreign tourists.
The Malaysian group’s multiple non-gaming investments in China, including a prominent ski resort that was used for the Beijing 2022 Winter Olympics, are also likely to bolster its chances, analysts said.
Genting has been more successful at generating non-gaming revenue. In 2019 around 35 per cent of total revenue at its Singapore property came from non-gaming versus 10-20 per cent for Macau casinos.
Covid crunch
The Covid-19 crisis exposed Macau’s over-reliance on gaming, which analysts say underline the urgency to diversify as many of the incumbents are still struggling to recover.
Macau, the world’s biggest gaming hub by revenue, raked in US$36 billion in gambling revenues in 2019 – six times the Las Vegas Strip, before Covid decimated it by 70 per cent to US$10.8 billion in 2021.
Genting “can offer the Macau government whatever they expressly said they wanted,” versus the incumbents who have predominantly focused on Chinese VIPs, said Samuel Yin Shao Yang, an analyst at Maybank. Around 90 per cent of Macau’s visitation comes from greater China.
“Macau has been told over and over again to focus less on Chinese VIPs and more on non-gaming but they pretty much paid lip service to that idea. So now… they have to really make a hard divert to that philosophy,” Mr Yin said.
source https://netdace.com/latest-news/genting-aims-to-upend-macau-casino-landscape-in-bidding-war/