There is already enough competition in the Macau gaming market without further complicating matters by introducing a seventh concessionaire. So says Managing Director at Morgan Stanley Research, Praveen Choudhary, in response to recent suggestions that the Macau government may consider issuing a new casino license once those of the six current operators start to expire come 2020.
Speaking at the second annual ASEAN Gaming Summit at Conrad Manila on Tuesday, Choudhary also questioned the benefit of Suncity Group – which will open its first integrated resort in Vietnam next year and has been discussed as one contender for any additional Macau gaming concession – becoming a seventh operator.
“There is plenty of competition, there is no need to add more operators. Six operators is plenty for competition,” he said.
“If Suncity became an operator then none of the operators would want to work with them as a junket.”
Choudhary went on to ask whether Suncity would earn more money as a junket working with all the operators than they would as a standalone operator and suggested becoming the seventh concessionaire might actually be to Suncity’s detriment.
Choudhary added that while Macau continues to rely heavily on prevailing winds in China – as evidenced by the infamous downturn of 2014 and 2015 – the Chinese government had never actually set out to cause the local gaming industry any harm.
“China never came up with any regulations to hurt Macau,” he said. “They always did things for their own country and Macau was just collateral damage.”
It was noted by the panel – also comprising Research Analyst Gaming & Lodging at Bloomberg Intelligence, Margaret Huang; Head of Industrials, Property and Consumer, South and Southeast Asia at Fitch Ratings, Vicky Melbourne; and SVP Operations Control and Improvement at Imperial Pacific International, Lu Tsai – that there was never any reason for President Xi Jinping’s government to target Macau due to capital outflow and concerns over corruption given that capital outflow and corruption from other sources in China dwarfs any amount Macau might contribute.
