The public tender bidding process has proceeded according to schedule and smoothly, Sands China management pointed out in the group’s most recent conference call.
The responsible Macau SAR gaming committee is currently analysing the accepted bids and initiating discussions and consultation with the companies that have been accepted into the race.
The seven bidders in this race are: Wynn Resorts (Macau) S.A., Venetian Macau S.A., Melco Resorts (Macau) S.A., MGM Grand Paradise S.A., Galaxy Casino S.A., SJM Resorts S.A. and GMM S.A.
The Macau government aims to have the results of the public tender for the new 10-year gaming concessions to be ready by year-end.
One of the criteria requested by the commission for bidders to be successful involves holding an adequate financial capacity to sustain their planned development projects and operations.
“We’ve been working with the government closely. And a couple of rounds of discussion have been held. We are waiting for the government notification, on whether there will be another next round of discussion. And the timetable remains the same. Everything is in good progress, and we expect some notification towards the end of the month for us to know what’s the next step,” Sands China President Wilfred Wong stated during the call.
Recently Asian American Entertainment Corp (AAEC), a company in a longstanding dispute with three of Sands China’s subsidiaries submitted a letter to the gaming commission questioning the bidder’s financial capacity.
AAEC urged the tender commission to look into the financial capacity of the Sands China-linked subconcession holder to bid for a local gaming concession, in case AAEC wins the appeal it has lodged to the Court of Second Instance, after the city’s Court of First Instance ruled in favour of Las Vegas Sands Corp (LVS).
AAEC, led by Taiwan businessman Marshall Hao, was seeking compensation of at least MOP60 billion (US$7.5 billion) plus extra from three affiliates of the US gaming company over claims of breaching their partnership arrangement in a bid for a Macau gaming concession two decades ago.
Brokerage JP Morgan Securities (Asia Pacific) recently disputed the impact of the letter on Sands’ chances of winning a new concession, stating that investors shouldn’t worry about it, with the group also not addressing the issue either in its latest third-quarter financial report or the conference call.
During the call, Sands China COO and Executive Director Grant Chum also commented that the group welcomed the smooth progress in the process” and that it still expected the entire process to be completed by the end of the year, as previously stated by the government.
As for the gaming operator’s prospects on the market’s performance in the last quarter of the year Sands China CEO and Chairman Robert G. Goldstein acknowledged that Macau’s “operating environment has remained difficult but underscored that “in periods when the restrictions have been relaxed, customer demand and spending in Macau have proven resilient at the premium mass level from both a gaming and retail perspective.”
Mainland China will reinstate both package tours to Macau and eVisas under the Individual Visit Scheme (IVS) in what shapes as a massive boost for the SAR’s gaming and tourism operators.
“We absolutely welcome the opportunity to invest even more in the non-gaming products and offerings in Macau […] We have great confidence in Macao’s tourism recovery and its long-term growth prospects”
Sands China reported a net loss of US$472 million (MOP3.8 billion) in the third quarter of 2022, and again a negative adjusted property EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) of US$152 million.
“Could be EBITDA positive [in the fourth quarter] Sure, if things open up and visitation returns. And that’s going to happen at some point. But I think it’s difficult for us to tell […] without knowing what effect the visitors team will have in November and then also not knowing how zero COVID in force will happen. So there are certainly unknowns in Macau are very difficult to guess,” the Sands China CEO added.