{"id":243632,"date":"2022-11-16T18:03:56","date_gmt":"2022-11-17T00:03:56","guid":{"rendered":"https:\/\/www.casino.org\/news\/?p=243632"},"modified":"2022-11-16T18:44:38","modified_gmt":"2022-11-17T00:44:38","slug":"macau-spending-expected-to-be-12-5-billion-over-next-10-years","status":"publish","type":"post","link":"https:\/\/www.casino.org\/news\/macau-spending-expected-to-be-12-5-billion-over-next-10-years\/","title":{"rendered":"Macau Spending Plan Likely Palatable to Concessionaires, Says Bank"},"content":{"rendered":"

Macau\u2019s retendering process is ongoing, with recent reports suggesting the seven operators bidding for six gaming licenses are comfortable pledging $12.5 billion in expenditures over the next 10 years.<\/p>\n

\"Macau
The Venetian Macau. It’s believed authorities there will require gaming companies to spend $12.5 billion over 10 years. (Image: Kim Cheung\/AP<\/em>)<\/figcaption><\/figure>\n

A Portuguese media outlet recently reported that the agreement is already in place. The established Macau operators are Galaxy Entertainment, Melco Resorts & Entertainment (NASDAQ: MLCO), MGM China, Sands China, SJM Holdings, and Wynn Macau. All of those companies submitted bids<\/a> to renew their permits. Genting Malaysia is the seventh bidder and is hoping to usurp one of the entrenched operators.<\/p>\n

Assuming the $12.5 billion spending requirement is accurate, it\u2019s likely tolerable to the six existing concessionaires because they spent a combined $35 billion over the previous decade.<\/p>\n

Granted, this is not an apples-to-apples comparison as there will no longer be any \u2018mega casino\u2019 projects. But construction costs have gone up considerably over the past decade and even a renovation project (e.g. Londoner renovation by Sands) now costs US$1.4 billion of hard capex,\u201d<\/strong> wrote JPMorgan analyst DS Kim.<\/p><\/blockquote>\n

It\u2019s widely believed that Genting Malaysia — if it wins a casino license in Macau — can easily meet its share of the required $12.5 billion.<\/p>\n

Galaxy, Sands on Hook for Most Spending<\/h2>\n

Galaxy Entertainment and Sands China are the two largest Macau operators. They account for approximately 45% of gross gaming revenue (GGR) in normal operating environments in the special administrative region (SAR).<\/p>\n

The bulk of their business is derived from mass and premium mass players.<\/a> That\u2019s a benefit, as the SAR\u2019s VIP circuit may never return to normal following the demise of the junket industry.<\/p>\n

\n

As such, they\u2019re likely on the hook for the largest slices of the aforementioned $12.5 billion. It\u2019s estimated that both Galaxy and Sands China will be required to contribute $2.5 billion, while the other four concessionaires will contribute $1.9 billion apiece.<\/p>\n<\/div>\n

\u201cThe average US$2 billion commitment per operator basically indicates one big renovation\/redevelopment project plus some flagship events\/shows over the next 10 years, in our view, which is something that operators would do even if there\u2019s no mandatory investment requirement,\u201d <\/strong>according to JPMorgan.<\/p>\n

How Genting Figures Into Macau Spending<\/h2>\n

Genting stunned the gaming industry in September when it decided to enter the Macau fray. Because of the company\u2019s success with gaming venues around world, including Resorts World Sentosa in Singapore, it\u2019s viewed as a credible contender<\/a> in Macau.<\/p>\n

How that takes shape remains to be seen, because the SAR\u2019s newly revised gaming laws allow for just six concessionaires. That doesn\u2019t mean Genting won\u2019t surpass an established rival. But market observers view that as unlikely because of the complexities associated with removing one operator and adding a new one.<\/p>\n

JPMorgan\u2019s Kim notes the most feasible avenues for Genting entering Macau are via an equity investment in or a joint venture with an existing concessionaire. Either could be appealing, given the capital needs of several operators there.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Macau\u2019s retendering process is ongoing, with recent reports suggesting the seven operators bidding for six gaming licenses are comfortable pledging $12.5 billion in expenditures over the next 10 years. A Portuguese media outlet recently reported that the agreement is already in place. The established Macau operators are Galaxy Entertainment, Melco Resorts & Entertainment (NASDAQ: MLCO), […]<\/p>\n","protected":false},"author":46,"featured_media":243634,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[69069,62],"tags":[81913,81897],"acf":[],"yoast_head":"\nMacau Spending Expected To Be $12.5 Billion Over Next 10 Years<\/title>\n<meta name=\"description\" content=\"Macau spending is forecast to be $12.5 billion combined over 10 years for the six operators.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.casino.org\/news\/macau-spending-expected-to-be-12-5-billion-over-next-10-years\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Macau Spending Expected To Be $12.5 Billion Over Next 10 Years\" \/>\n<meta property=\"og:description\" content=\"Macau spending is forecast to be $12.5 billion combined over 10 years for the six operators.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.casino.org\/news\/macau-spending-expected-to-be-12-5-billion-over-next-10-years\/\" \/>\n<meta property=\"og:site_name\" content=\"Casino.org\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/Casino.OrgNews\" \/>\n<meta property=\"article:published_time\" content=\"2022-11-17T00:03:56+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-11-17T00:44:38+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/11\/macau.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1100\" \/>\n\t<meta property=\"og:image:height\" content=\"825\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Todd Shriber\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@etfgodfather\" \/>\n<meta name=\"twitter:site\" content=\"@Casino_Org\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Todd Shriber\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.casino.org\/news\/macau-spending-expected-to-be-12-5-billion-over-next-10-years\/\",\"url\":\"https:\/\/www.casino.org\/news\/macau-spending-expected-to-be-12-5-billion-over-next-10-years\/\",\"name\":\"Macau Spending Expected To Be $12.5 Billion Over Next 10 Years\",\"isPartOf\":{\"@id\":\"https:\/\/www.casino.org\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.casino.org\/news\/macau-spending-expected-to-be-12-5-billion-over-next-10-years\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.casino.org\/news\/macau-spending-expected-to-be-12-5-billion-over-next-10-years\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/11\/macau.jpg\",\"datePublished\":\"2022-11-17T00:03:56+00:00\",\"dateModified\":\"2022-11-17T00:44:38+00:00\",\"author\":{\"@id\":\"https:\/\/www.casino.org\/news\/#\/schema\/person\/f4cecf70a5032bc4e60eb73fc86d4a85\"},\"description\":\"Macau spending is forecast to be $12.5 billion combined over 10 years for the six operators.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.casino.org\/news\/macau-spending-expected-to-be-12-5-billion-over-next-10-years\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.casino.org\/news\/macau-spending-expected-to-be-12-5-billion-over-next-10-years\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.casino.org\/news\/macau-spending-expected-to-be-12-5-billion-over-next-10-years\/#primaryimage\",\"url\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/11\/macau.jpg\",\"contentUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/11\/macau.jpg\",\"width\":1100,\"height\":825,\"caption\":\"The Venetian Macau. 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