It’s been expected that the Macau government will take a “pragmatic” approach to the expected public retender of Macau gaming rights that will be occasioned by the upcoming expiry in 2022 of the existing six public concessions.
Fitch Ratings Inc said that would be the first “milestone” to watch for as it might also clarify the tenure period for fresh concessions, and what percentage of tax on gross gaming revenue might be applicable. The current effective rate is nearly 40 percent. After that, the next key event to watch out for would be the conditions to be set by the Macau government for the gaming concession retender process.
“We expect the U.S.-based concession holders to be treated [as] on a level playing field with their Asian counterparts given the large amount of foreign investment, positive local sentiment on the concession holders (jobs, local investment), and adverse impact the effective nationalization of gaming could have on broader foreign investment in China and its Special Administrative Regions,” the ratings house noted.
The prospects for the Macau existing gambling concession holders could be weighed down by the risk of a “seventh concessionaire”; incremental fresh investment being required; and increases to the city’s gaming tax rate, the rating house said. But it noted that such risk was in likelihood “manageable”.
The industry is not optimistic regarding the VIP gambling segment in 2020, which could face “additional downside risk” if China-U.S. trade tensions were to “escalate” and have a negative impact on Chinese business owners, the sort of high-value players for whom Macau traditionally caters.
No Copyright infringement intended. Video/Photo Unknown Direct for credits/issue or text us +57 3606412 ... | Respect to Photographers & Influencers
