As per a recent announcement from the Macau government, the casino license bidding process is set to begin on Friday, July 29, and last through September 14. Global gaming operators wishing to remain in the city must bid for new permits alongside new players also vying to operate. Companies are required to provide a guarantee of not less than 10 million patacas ($1.24 million) and submit the required qualification documents.
According to a statement issued Thursday, when bidding “special consideration should be given to developing foreign tourist markets, experience in operating casino games, investment in gaming and non-gaming projects for Macau’s benefit, plans to manage the casino, plans to monitor and prevent illegal activities and social responsibilities,” reports by Reuters.
Failure to secure new contracts, set to begin in 2023, means current operators will be banned from operating casinos on which they depend for their business and in which they have invested billions over the past two decades. Licenses for the current casino operators, which include Wynn Macau, Sands China, MGM China, Galaxy Entertainment, SJM Holdings, and Melco Resorts – will expire on December 31.
The draft rules for the process were released earlier this month, and came after the government passed Macau’s amended gaming law last month, which marked the biggest legal reforms for the industry in two decades.
Concession contract extensions signature at Macau's Government Headquarters in June
Earlier this week, the government announced the creation of a nine-person Committee for Public Tendering of Concessions for the Operation of Casino Games of Fortune. The committee has powers to analyze and decide all matters relating to the public tendering process and relating to the formulation of concession contracts. Exceptions are either provisional adjudication or actual adjudication of tenders; and other matters specified by law as the responsibility of other entities.
Casinos in the gaming hub reopened recently after a nearly two-week shutdown mandated in an effort to stop the spread of Covid-19. However, due to travel restrictions still in place, low tourism is causing businesses to be slow for the gaming venues, and analysts have estimated the closures could cost the casinos $1 billion.
Even though allowed to return to business, casinos are required to limit staff numbers to 50% of normal and must follow strict disinfection and health guidelines. Employee dining facilities are off limits and local citizens have been directed not to go out except to get food or for emergencies.
According to experts, the casino industry at large is expected to see a shortage of staff once the economy returns to normal and operators should have a clear plan for reemploying staff who have left. Andrew Klebanow, co-founder and senior partner of C3 Gaming, said that Las Vegas, to this day, is still short on staff, following casino closures during the peak of the pandemic.
In an online seminar of the French Chamber of Commerce (FMCC) titled “The Road to Macau Tourism Recovery,” the gaming consultant said that not only are they short on staff in the hospitality industry, but also in all sectors of the economy. He explained that US casinos are just one of many industries struggling to add new workers, and they find themselves competing with each other not only for casino workers but for people with experience in the hotel, restaurant, and tourism industries, to name just a few.
“I suspect you will have this problem also, considering how many of your expatriate employees have left. There are just a lot of people who have left. A lot of expatriates went home and are very reluctant to return. They just said that they were done,” Klebanow said in regards to Macau.
“You need to plan for this. What is it going to take to get these employees back and get them back in a hurry when business kicks in? Because you will find yourself not getting the hotel rooms done on time, and failing to get people into the restaurants,” he added, as reported by Macau Daily News.
Rutger Verschuren, chairman of the FMCC and president of the Macau Hotel Association, said that he also expects to see the same problem in Macau. “We have to be ready. […] One room attendant can do 12 to 13 rooms a day, depending on the property. Considering there are 40,000 rooms in Macau, we need more room attendants for that,” he added.
According to analysts, casinos have had close to zero revenue since mid-June, when the city’s outbreak began, and they are expected to have little to no income in the coming months. Even prior to their closure, analysts estimated the casinos were burning through some $600 million each month because of pandemic-related restrictions.
The latest lockdown has taken a toll on the sector, as it had been struggling since the start of the pandemic, with revenues tumbling 70% in 2021 compared with 2019 to $10.8 billion. Macau casino shares have also sunk dramatically, between 21% and 76% since 2020, as the city adheres to China’s “zero-COVID” policy that aims to curb all outbreaks.