Melco Resorts & Entertainment and Wynn Macau Ltd have both confirmed that they will be required to pay an “extension premium” of MOP$47 million (US$5.8 million) to have their current Macau gaming concessions extended for six months.
The premium matches the amount previously announced by other Macau concessionaires, including Sands China, following the news last month that the six SAR casino gaming operators would have their concessions extended from the former expiry date of 26 June 2022 to 31 December 2022.
DICJ Director Adrian Ho also confirmed on Thursday that the Macau SAR Government has already received extension applications from all six concessionaires.
Releasing their 2021 annual results this week, both Melco and Wynn said they had submitted their applications on 11 March 2022 and would be required to pay MOP$47 million for the extension. This amount is 6% lower than the bottom end of the “MOP$50 million to MOP$80 million (US$6.2 million to US$9.9 million)” range reported by TDM Radio some three weeks ago. The concessionaires will also have to provide a bank guarantee in favor of the Macau government for the payment of potential labor liabilities should they fail to be granted a new concession or fail to have their concession or sub-concession further extended after 31 December 2022.
Wynn said it is “monitoring developments with respect to the Macau government’s concession extension and renewal process and at this time believes that its concession will be extended and renewed beyond 26 June 2022.”
IAG had previously estimated a fair value for the “special premium” could arguably be amounts ranging from MOP$14 million to MOP$45 million, based on various calculation methodologies.
Under Macau gaming law, the current concessions and sub-concessions can be extended again beyond 31 December 2022 as many times as the government chooses up to a cumulative total of five years, however it is widely believed the government will endeavour to pass its amended gaming law and complete the re-tendering process, including determining the winning bidders and signing new concession contracts with those winning bidders, by the end of this year.
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