All Casinos in Hong Kong will need to rebid for their licenses scheduled to expire on the 22nd of June 2022. With no information on the rebidding process, the license situation will likely hang over the shares of the six operators All Casinos in Hong Kong will need to rebid for their licenses scheduled to expire on the 22nd of June 2022.

It is highly likely that the casinos licenses will get renewed though. Macau’s economy is heavily skewed towards casinos with over 80 percent of taxes coming from gambling and casino companies. This is despite China urging Macau to diversify away from gambling.

Policy and regulatory changes are in focus with the election this year of a new leader in the special administrative region, who will work with mainland authorities for the next five years.

The two likely contenders are Ho Iat Seng, president of Macau’s Legislative Assembly, and Lionel Leong, the secretary for economy and finance, which oversees the gaming industry.

Download the DCF Model below. It is a very basic model with normal assumptions for revenue growth, operating working capital schedule & the PPE schedule. Feel free to add in your own assumptions and make relevant changes! The model is based on YoY averages hence it is not as accurate as I wish it to be.

With Wynn Macau trading close to their 2 year low of 16.40, it seems like a stable support. I would expect volatility moving forward this year, due to the Macau elections and talks about renewing of licenses.

Links:
https://www.reuters.com/article/us-macau-casinos-licences/macau-casino-licenses-for-mgm-china-sjm-extended-to-2022-idUSKCN1QW0BH
https://www.scmp.com/business/companies/article/3001800/macau-extends-gambling-licenses-sjm-and-mgm-china-until-2022