Macau has seen a lot of movement with its casinos over the past couple of years, partly in an effort to align them all for a major event scheduled for 2022. According to the current gambling laws, the casino licenses held by operators aren’t eligible for renewal, in the strictest sense of the word. Instead, the laws are going to force an entirely new tender bidding process when the licenses expire two years from now. To get all the casinos on the same page, SJM Holdings and MGM China Holdings were granted license extensions to avoid having their licenses expire this year, and to put all the city’s casinos on even ground for the tender process in 2022. However, if JP Morgan analysts are correct, that process might not happen in 2022 because of, in part, the coronavirus.

Macau’s gambling structure was created in such a way that licenses would not be automatically renewed until the end of time. They allow for a maximum extension of up to five years beyond 2022; however, the tender process would be opened up to all possible entities, and no guarantees are offered that current licensees would retain their permits. It goes without saying that stripping an existing operator of its license is a farfetched idea, but it isn’t out of the realm of possibilities.

Macau is rewriting its gambling laws. It wants to become a more versatile destination that isn’t as reliant on casinos for its revenue, and wants the gambling venues to be more proactive in making that happen. The current COVID-19 pandemic has reinforced the city’s position that it has been too reliant on gaming and needs to diversify its offerings. Macau officials, under the leadership of the city’s new leader, Ho Iat Seng, are revamping the gambling laws and could obligate some casino operators to make changes.

Once the new laws are drafted, they will have to be pushed out to the public to allow for feedback. That is still scheduled to take place later this year, but the laws would then have to be approved by Macau’s Legislative Assembly, which couldn’t happen until next year. JP Morgan analysts DS Kim, Derek Choi and Jeremy An feel that a 2021 review is overly optimistic and believe that 2022 might be the earliest any approval could be given. They add, “Thus, we wouldn’t be surprised to see the renewal [rebidding] process postponed by a year or so versus the current expiry of June 2022.”