Licensing changes trouble casinos

Finance | Staff reporter and Agencies 21 Sep 2021

Macau gaming operators showed concern at the government sending representatives to the companies and demanded a clearer definition of illegal receipt of capital in the first consultation meeting yesterday.

SJM Holdings (0880) said it did not oppose the proposed scrapping of the secondary license as it is a practical approach due to what has happened in the past 20 years.

And it supports the amendment of the law to improve the legal system.

However, SJM said it may send a negative message to investors about their returns if the duration of the newly granted licenses is too short.

Galaxy Entertainment Group (0027) said the duration of licenses should take into account Macau's sustainable development as a whole and can take reference from other gaming markets in Asia. It will submit a more detailed written proposal after the consultation.

The Office of the Secretary for Economy and Finance said that the abolition of subconcessions is aimed at maintaining the scale and stability of the industry, hoping the licensing would not become unlimited.

On the introduction of representatives to the company, the regulator said the practice is not new as it already existed in 1992 under the law at that time. And the government has already sent representatives to various institutions.

The duration of licenses will be based on a combination of factors, including the stability of the job market and reasonable expectation of returns, it said.

Some companies suggested the regulator cooperate with its mainland counterparts to set up a cross-border database of those who had huge debts so as to make it harder for them to borrow in Macau. They also asked for it to be easier to go to the mainland to collect debts.

The regulator said suggestions from the industry are welcomed and any comments from this consultation will be analyzed.

Macau will hold four meetings following the consultation to solicit views from the public, before drafting a final proposal to be presented to the city's legislature.

Macau officials said last week they would change casino regulations to tighten restrictions on operators, as Beijing moves to bolster its grip. Authorities are seeking "direct supervision" over the day-to-day operations of Macau's casinos, increased local shareholdings in the operators and tighter controls on the distribution of dividends.

The announcement triggered panic in the market, with gaming stocks shedding a record HK$143 billion in combined market value last Wednesday.

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