Failure to renew all of Macau’s six concessions would result in substantial risk to government finances due to the significant amount of tax they generate and how many people they employ, Moody’s said.
The ratings agency said it expects all six to be awarded a new license by the end of this year.
Macau’s amended gaming law, which was passed on Tuesday, puts the number of concessions at a maximum of six. It does away with the current sub-concession system, under which three of the operators are piggybacking on the license of the others.
The concession period has been reduced from 20 years to 10 years with the potential to extend for a further three under special circumstances.
“We do not expect the amended law to bring significant changes to the gaming industry in terms of competitive landscape and regulatory regime,” Moody’s said.
All six of the Macau operators have a negative ratings outlook at Moody’s due to the slow post-Covid recovery. That outlook has deteriorated further with the latest outbreak, with the city placed in lockdown.
Moody’s expects mass-market gaming to be about 40 percent of 2019 levels, before improving to 80 percent next year and fully recovering in 2024. However, it doesn’t expect any significant recovery in the VIP market due to the crackdown on junkets