Report claims Macau government demanding greater investment guarantee from concession bidders as final proposals submitted

November 28, 2022 Macau Earnings & Filings Industry Updates

The Macau SAR Government has asked the seven companies bidding for a new 10-year gaming concession from 2023 to increase their proposed levels of investment, according to a report from TDM Portuguese Radio. This, the station said, came as the bidding parties completed negotiations with the government and submitted their final proposals this week.

It is also said that the preliminary results of the tender committee will be announced shortly, possibly as early as this week.

Central to TDM’s report is that the government has asked the contenders to increase their proposed amount of investment. The media outlet revealed last month that the six companies who ultimately win a new gaming concession had agreed to invest a combined MOP$100 billion (US$12.5 billion) over the duration of the 10-year concession period, with Galaxy Entertainment Group and Sands China to each invest more than MOP$20 billion (US$2.5 billion) and the remaining four to invest closer to MOP$15 billion (US$1.88 billion).

At Tuesday’s final meeting, TDM claims the government requested a further increase in the amount of investment. According to the report, Galaxy Entertainment Group and Sands China could be expected to invest more than MOP$50 billion, while the other four concessionaires would also invest more than their previously agreed amount.

The report adds that non-gaming investment would include a commitment by the tenderers to build an art museum, develop an annual convention program, launch major concerts and provide international-quality entertainment and sea tours.

With the government’s negotiations now nearing their conclusion, a provisional award will be made based on the proposals of the seven bidders, with the six tenderers most conducive to the development of the Macau SAR receiving provisional awards – although the ultimate decision on who wins a concession will come down to Macau Chief Executive, Ho Iat-seng.

Under Macau’s new gaming law, tenderers who are granted a provisional concession will be required to submit information to the Gaming Inspection and Coordination Bureau (DICJ) around its minimum capital requirement of MOP$5 billion (US$625 million).

The government will then draw up the final award contract and each awarded company will have five days to express its views. The report states that the government may sign the concession contract with the awarded company before 20 December, with the new concessions to take effect as of 1 January 2023.