This commentary appears in the Premier Issue of Focus on Asia, published July 7, 2020.
If there is one silver lining to emerge from the COVID-19 pandemic for the new Macau government, it’s the reprieve it has granted them on questions about the re-tendering process for Macau gaming licenses. The reprieve won’t last long. With the licenses of all six concessions and sub-concessions due to expire in July 2022, and with details of re-tendering still glaringly hazy, the issue is certain to become the hot topic of discussion once the coronavirus pandemic starts to ease.
While the current concessionaires will no doubt busy themselves with making sure they cross the t’s and dot the i’s of the government’s licensing demands, the most intriguing question from an industry perspective remains how many licenses will be handed out. More specifically, could there be a seventh concessionaire (assuming the current six are all granted new licenses) and if so, who?
The way I see it, and accepting that any seventh license handed out is almost certain to go to a “Chinese” operator, there are three, maybe four, contenders.
The most obvious, of course, is Suncity Group. The idea that a junket could one day hold a Macau gaming license would have seemed laughable five years ago, but Suncity is no longer just Asia’s dominant VIP player. On 28 June, the company’s US$4 billion Vietnam integrated resort Hoiana – a three-way joint venture between Suncity, Chow Tai Fook and VinaCapital group – welcomed its first guests, a major milestone on Suncity’s journey to become a leading IR operator.
Suncity also holds a 24.74% stake in Summit Ascent, operator of Russian casino resort Tigre de Cristal, and is in the process of upping that stake to almost 70%. In Manila, another Suncity subsidiary will operate the main casino and hotel at Westside City Resorts World – a major IR development that counts Travellers International Hotel Group, operator of Resorts World Manila, among its key investors.
Also in the mix for a Macau casino license is Genting Group. One of the world’s largest gaming operators, Genting has a presence in almost every major gaming jurisdiction in the world but is a notable absentee in the biggest market of them all, Macau. It is, however, developing a hotel dubbed Resorts World @ Macau on land that one of its subsidiaries, Genting Hong Kong, holds a 75% stake in on Nam Van Lake.
Based in Malaysia, Genting Group isn’t exactly Chinese, but nor is it Western, and it seems almost certain the company will at least dip its toe into the water once Macau’s license re-tendering gets underway.
Who else do we see eyeing a Macau gaming license? Certainly, some of the current satellite and second-tier operators, the likes of Macau Legend (which owns the Macau Fisherman’s Wharf precinct) and influential businessman Chan Meng Kam’s Golden Dragon Group, will apply.
But as a smoky, how about Chow Tai Fook? Partners with Suncity Group at Hoiana, the Hong Kong-based jewelry giant also holds a 4.99% stake in Australia’s Star Entertainment Group and operates the US$4.2 billion Baha Mar mega-resort in the Bahamas, which it acquired for a steal in 2016.
CTF is no stranger to Macau’s gaming industry, with Chairman Henry Cheng still holding a 9.6% stake in Sociedade de Turismo e Diversões de Macau, S.A (STDM), the parent company of Macau concessionaire SJM, purchased from Stanley Ho by his father in the 1980s. And let’s not forget that daughter Sonia
Cheng oversees Rosewood Hotel Group, which is actively opening its luxury hotels at some of the most prestigious new IR developments around the world, including Hoiana.
The Cheng family has serious connections and CTF has influence, so it wouldn’t surprise at all to see them throw their hat into the ring in what promises to be a fascinating race for Macau’s riches.
Whatever the case, the Macau government can expect no shortage of amorous suitors lining up at its door once the re-tendering process gets underway in earnest.
