The new concession period in the Macau gambling industry commences on January 1, 2023. The Macau government has therefore announced the allocation of tables and slot machines following its previous announcements that the number of tables and slots under the new concessions would be reduced to 6,000 and, respectively, 12,000.
Law provisions:
The Chief Executive made a public announcement earlier this year. The Chief Executive pointed out that according to the Gaming Law, “the total number of gaming tables and gaming machines to be granted for new gaming operations starting from early next year will be capped according to the actual number of gaming tables and gaming machines in operation in Macau.”
The Gaming Law imposes a range of taxes and charges for table and slot operators, with GGR-based charges alone totaling 39% of operating revenue. Under Article 20 of the new Macau gaming law, the minimum annual gambling revenue per table has been set at MOP$7 million ($870,000) and the minimum annual gambling revenue per gaming machine is MOP$300,000 ($37,500).
Reduction of tables and slot machines:
The measure will result in a 13% reduction in tables from the former 6,925 allowed under the previous concession period ending on December 31st, 2022. It will be also reflected through a 3% reduction in slot machines from the last official count of 12,387 machines as of the end of September.
Generally, if 6,000 gaming tables are approved at a minimum annual gambling revenue per table of MOP$7 million together with 12,000 gaming machines at the minimum annual gambling revenue per machine of MOP$300,000, the total minimum gambling revenue for both gaming tables and machines would therefore be MOP$45.6 billion ($5.7 billion).
Gambling revenue remains the same:
The projected value may be based on the expected 2022 gross generated revenue level as Macau saw its GGR at the level of MOP$38.7 billion (US$4.83 billion) at the end of November 2022. The recent decision of Macau authorities to open gambling facilities and approve a 5% tax relief to operators for attracting foreign visitors to the region during the holiday season may help bring the 2022 revenue value around the projected figure.
Allocations as contingency:
The announced allocation of tables will affect five out of six concessionaires. SJM, Melco, Wynn, GEG and Sands are losing a total of around 1100 tables, with SJM losing 743 tables alone reflecting the demise of many satellite casinos in Macau. At the same time, MGM will take advantage of the situation to win additional 198 tables over its former allocation, which is a 36% increase for the concessionaire.
The allocation of slot machines between the concessionaires is estimated to favor GEG, MGM, and Wynn, with GEG expected to experience a 31 percent increase in slot machines. SJM will face a 31 percent reduction here, while Sands and Melco will operate through the next year with 8% and, respectively, 6% lower slot machine count.
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