Tag Archives: Macau

Macau’s casinos face up to common Prosperity

It would appear that the lights are about to be turned up on Macau’s casinos. With 20-year concessions expiring next year, the government has released a list of changes it would like to implement, several of which appear similar to those launched recently under Beijing’s “Common Prosperity” drive. The way these were unveiled and the perceived lack of detailed explanation by the government has sent stocks tumbling.

Are investors over-reacting? It might depend on ROI time horizons. A big shift is under way, but it has been years in the making and will take decades to play out. Now is a good time to be considering the long-term opportunity, remembering what makes Macau special. This is especially when looking more closely at the development of neighboring Hengqin, a special zone on an island next door to Macau’s Cotai district, which is more than three times the size of the whole of Macau.

With this in mind, GBI has prepared a report looking ahead to beyond the awarding of new gaming concessions, which should happen sometime before the old ones expire in June next year (2022). Under this 10-year outlook, it is likely that strong growth will resume as the Hengqin Port becomes the main entry point to Macau and Beijing works with Macau to make the pioneering integration project a success. It is envisaged that GGR could double from pre-pandemic levels by 2031 as Macau’s merger with Hengqin drives mass visitation.

The main risks are macro: Disease containment and socio-economic stability in the hinterland.

Please get in touch for a copy of the report, which is only available to clients of GBI’s consulting service.

Hengqin plan is game-changer for Macau

Hengqin, the special economic zone opposite Macau’s Cotai casino district, has been turned into a bold new experiment. Macau will essentially take over the daily management of the zone from Zhuhai, but will have to consult the provincial government on major policies.

The zone will be jointly managed by a committee, but Macau will be in the driver’s seat: This is clear from the fact that Macau will appoint the Executive Deputy Director of the zone’s management committee. Although Macau’s CE and Guangdong’s governor will be co-heads, the EDD will run the show on a daily basis. The language of the announcement makes it seem like this is a JV, but really this is Macau’s project. 

There is much talk about diversification, with hi-tech industries, including manufacturing, and financial services being given lots of ink. But tourism is still the key. The plan makes no mention of the gaming concessionaires, and the tourism section calls it “cultural tourism”. But make no mistake, what this means in practice is that SMEs will get subsidies to pursue tech ideas, most of which will flop, and the banks will be able to build up some wealth management products in Hengqin, but the only projects that will actually make money will be in tourism, and so they will get the lion’s share of attention and resources.

This will take time, however: No one should expect a press release on the casinos being given a role in Hengqin before the concessions are renewed next year. The deadline for getting the management committee fully functional is only 2024. The goal for integration to be fully realised is only 2035.

Continue reading Hengqin plan is game-changer for Macau

Macau lawmakers say ‘no rush’ on licenses; but this might speed the process

Macau’s health authorities announced over the weekend that mass testing of the entire city, around 700,000 people, had produced not a single positive case of Covid-19. However, they are still monitoring more than 1,000 close contacts of the family that last week became the first positive case of the Delta variant. Once that had been satisfied, the government was likely to ease restrictions on activity for the city’s residents and visitors, but another round of testing might be necessary.

More interesting for the longer-term future of Macau than the current Covid-19 scare, however, was the release of a “recommendation” paper from the legislature’s sub-committee on the future of the six gaming concessions, which expire next year, June, 2022. The legislative group has called on the executive branch to provide clarity on the process and timeline for awarding new concessions, which it calls a “re-tendering”. It also says that there should be no rush in this, i.e., hinting that the existing concessions should be extended in order to provide sufficient time for a well thought-out process.

Although the document contains nothing startling, it does bring up the curtain on a public performance between the city’s legislative and executive branches which could end up accelerating rather than delaying the awarding of new concessions, contrary to what many observers might currently imagine. And the emphasis in the document on national security considerations, particularly the recently passed criminal statutes by Beijing against gaming promotion on the mainland, provides food for thought about what could amended in the Gaming Law during the coming weeks and months.

For deeper analysis on this subject, readers are welcome to get in touch.


Macau has responded to the discovery of a local family of four infected with Covid-19 by forcing the entire city of 658,000 to get tested. It has also closed all entertainment venues, except the casinos and hotels. This includes bowling alleys, massage parlours, beauty salons, fitness centres, health clubs, karaoke venues, bars, night clubs, discos and dance halls.

Around 180,000 residents have already booked their NAT tests. It is as yet unclear whether the latest measures have had a strong effect on vaccination rates. Macau has been slower than either the mainland or Hong Kong at dispensing vaccines, despite the small size of the city. Around 37% of the population have received both jabs. The latest lockdown measures do not differentiate between those and the unvaccinated.

Gaming stocks listed in Hong Kong plunged for a second day on the news. They are now mostly below their lows seen soon after the start of the Covid-19 outbreak in February 2020.

More at Macaunews.org

Could Macau be ‘gifted’ Hengqin?

Macau Chief Executive Ho Iat Seng has set tongues wagging with comments to local media concerning Henqin, the island in neighboring Zhuhai, suggesting the central government could be preparing to transfer control over all or part of it to the Macau Special Administrative Region.

Ho said in an interview at an event in Macau today that “there is good news” for the specific progress of the so-called Guangdong-Macau Intensive Cooperation Zone, the parameters of which have not yet been clearly defined. “It will be announced within this month or next month”, Ho said, when asked about the details, adding that “it’s not convenient to disclose the relevant information now, as this is a central government policy.”

The Guangdong-Macau Intensive Cooperation Zone concept was first announced around the time of Macau’s 20th anniversary celebrations in December 2019, presided over by President Xi Jinping. One idea floated by political observers since then is that Macau would use this framework to expand the administration of its University of Macau campus on Hengqin. The campus currently has a fence running around it and is accessed only via a tunnel from the Macau side. But other analysts see a joint administration of the entire island being more likely, as its border controls could easily be moved back from the current Hengqin crossing to two bridges connecting Hengqin to the rest of Zhuhai. These already have customs checkpoints, because Hengqin is a New Area, a kind of special economic zone.

Ho went a bit further in today’s press conference, again hinting at what lay in store for Macau in Hengqin. The whole country hopes that Macau will be stable, develop at an appropriate pace, and diversify its economy, he said. When a reporter asked if this meant Hengqin could help in this mission of diversification, he said: “That is the road the country has paved for us.”

 More on GoodNews

Guangdong visitors all clear in Macau

All travelers from Guangdong may now visit Macau without needing to go into quarantine, according to Macau’s government. The change took effect at 6pm on July 7, as the Dashi subdistrict in Panyu, Guangzhou, was the last district to be lifted from the quarantine list. That leaves Ruili, in Yunnan, the sole place in mainland China on Macau’s quarantine list.

Guangdong has been the largest source of Macau’s inbound tourists in recent months, according to official data. The gambling mecca has been hammered by the recent rebound of cases in Guangdong, but is expected to resume growth in the second half of this year now that the outbreak has been brought under control.

More on GGRAsia

Melco invests in non-gaming resort in Zhongshan

Melco International, the Hong Kong-listed parent company of Macau casino operator Melco Resorts, has decided to step across the border by investing in a non-gaming project in Zhongshan. In a joint venture with Hong Kong-listed property giant Agile Group, Melco will build and operate a theme park within the development, which is a “premium residential, entertainment and hospitality mixed-use complex,” carrying an initial investment of 4 billion yuan in the land.

The land plot in Zhongshan covers an area of approximately 504,000 square metres (5.43 million sq feet), and includes various plots with land-use authorisations ranging from 40 years to 70 years, depending on specific utilisation, according to a separate filing to the Hong Kong bourse.

Although fellow gaming group Galaxy Entertainment has a plot of land in neighboring Hengqin, a special zone known as a New Area, it has not yet started work on the project. Melco would be the first of Macau’s gaming license-holders to open an operate a resort on the mainland once the project is completed in 2025.

More on GGRAsia

Macau court hears Sands US$12bn case

A former partner of the Las Vegas Sands Corp. is suing its local subsidiary in Macau over the 2002 awarding of its license in Macau, in a claim worth a staggering US$12bn.

Lawyers for the Asian American Entertainment Corp. are claiming that LVS broke their joint-venture contract unlawfully just before pairing up with Galaxy Entertainment in February 2002 for the license bids. The LVS-Galaxy venture went on to win one of two new licenses that were awarded just weeks later (the other one went to Wynn Resorts). AAE is claiming the astronomical amount because it says it is entitled to 70% of the profits of LVS subsidiary Sands China in Macau from 2002-2018.

In recent testimony, the former head regulator of Macau’s gaming industry said the addition of LVS to the Galaxy bid was clearly advantageous to Galaxy’s success, given the American company’s experience in Las Vegas. (The two companies split their license later that year, citing irreconcilable differences. This led to the creation of sub-licenses, two of which later were sold, by Wynn Resorts to Melco Resorts, and by SJM to MGM China.)

More on GGRAsia

Macau discusses Hengqin integration

Macau’s integration with neighboring Hengqin New Area under the GBA masterplan appears to be picking up after a high-level meeting was held between Macau and Guangdong last week. Macau Chief Executive Ho Iat Seng spoke of several areas of practical focus between the two sides after meeting his counterpart, Guangdong Governor Ma Xingrui, according to local media.

Foremost of these was the joint development of an area on Hengqin, yet to be formally defined, called the Intensive Cooperation Zone. It is not yet clear how this zone-within-a-zone will be governed, but it is possible that Macau law might be extended to it. This would be groundbreaking if it happens, as no such plan has yet been proposed for either of Guangdong’s two other New Areas ­– in Guangzhou’s Nansha or Shenzhen’s Qianhai. (Read our backgrounders on all of Guangdong’s zones, as well as specifically Nansha and Qianhai.)

What makes Hengqin more important to Macau is that the SAR is running out of space for development. Its current 20-year masterplan (2020-2040) does include land reclaimed from the sea, but nearly all of it is earmarked for residential development. Hengqin, opposite the casinos on Cotai, is seen as a place to expand industries and business – with some space already set aside for non-gaming tourism, Chinese medicine, technology, and the MICE industry, among others.

Read more on Asia Gaming Brief.

Greater Bay Insight provides bespoke consulting services for anyone interested in a deeper dive into Hengqin. We have a detailed report showing all available land usage approvals, as well as an analysis of Hengqin as a potential investment destination. Contact us for more details.

Macau aims for ‘free’ cross-border cashflows

Macau is looking to establish a basis for totally free cross-border capital flows between the Special Administrative Region and the mainland, according to its finance chief. Secretary for Economy and Finance, Lei Wai Nong, speaking at a Greater Bay Area Finance Forum hosted by Wynn Palace last Friday (June 11) said the Macau government is striving to achieve this goal – without providing a timeframe – in order to “foster financial cooperation with the partnering regions” on the mainland.

Lei was likely referring to plans being discussed with neighboring Guangdong related to the Hengqin New Area, a special zone situated opposite Macau’s casino resorts in the Cotai district. Free capital flows between Macau and the mainland would provide “a solid financial foundation to assist various industries from both sides to gain ground,” Lei said.

“The Guangdong-Macao Intensive Cooperation Zone in Hengqin is a crucial gateway for Macau to integrate into the development of the GBA. President Xi Jinping asked Guangdong Province and Macau to robustly facilitate the construction of cooperation zones, carving out conditions for the development of emerging industries and furthering the city’s economic diversification,” Lei said.

More on Macau Daily Times