According to Joji Kokuryo, managing director at Bay City Ventures, the changes to the concession scheme in Macau could impact Japan’s IR market. Kokuryo spoke with the CEO of Inside Asian Gaming (IAG), Andrew W. Scott, last night on what’s going on in Japan, when the subject came up. Macau is expected to conduct a concession renewal process in 2022 for the city’s six casino operators; however, the details are still a little sketchy. Technically speaking, according to how the licensing laws are structured, concessions cannot simply be renewed – new tender processes are required. However, there’s little chance of an established casino operator losing its license.
Kokuryo explained while talking to Scott, “The deadline for the national submission was originally the end of July next year, and at this rate, we are not going to hit that date – it’s not a very viable date considering that there is still no national policy. So, the next logical question is how long is the extension going to be? There has to be logic on that front. A lot of people are saying two years, but let’s think about what’s happening in Macau in two years – the concession retendering. If you have operators that work in both markets (such as MGM, Galaxy and Melco Resorts), it’s part of their whole business plan. If these are the operators the Japanese government wants to bring, then it would be in their best interest to make sure it doesn’t overlap with something that is already a heavy burden on these companies.” He added, “The idea of a two-year extension I would scrap, so realistically I think we are looking at six months or a year for the extension.”
With the concession issues expected to appear in 2022, there isn’t much time for Japan to make a move. However, there is a chance that Macau might need more time, which could impact Japan’s plans, as well. Scott asserted that, as Macau officials continue to be mum on how the concession tender process will work, and with time quickly running out on existing licenses, a delay might be in order. He explained, “Legislatively, Macau could extend the current concessions for up to another five years. If this were to happen it might give Japan some leeway in their process too.”
There could also be trouble ahead for the entire IR project. Japan Prime Minister Shinzo Abe, inarguably the strongest proponent behind the push to bring casinos to the country, is stepping down due to health issues. With talk by some legislators of wanting to scrap the gambling plan, the absence of its biggest supporter might signal trouble ahead.