VML subconcession extended to 31 December 2022

The Macau government approved and permitted the extension of the subconcession held by Venetian Macau, S.A. (VML) and Galaxy Entertainment, moving its expiry from 26 June 2022 to 31 December 2022, according to VML's 2022 annual report¹. The extension was established by VML and Galaxy¹. VML paid the Macau government MOP 47,000,000 for it¹.

The same report sets out the wider licensing sequence that followed. The government provisionally awarded six concessions to six bidders, including VML, subject to conditions including a MOP 1,000,000,000 bank guarantee covering statutory, contractual and other obligations such as labor obligations; VML met all those conditions by 9 December 2022¹. The government then awarded six concessions, with VML among the concessionaires, and it signed a concession contract¹. VML later asked for the release of all bank guarantees it had provided under the subconcession¹.

The report also records the handover of gaming assets. VML, Venetian Cotai Limited, Venetian Orient Limited and CSL2 each signed vesting deeds confirming that, on expiry of the extended subconcession, the relevant gaming assets would vest in the Macau government free of charge and encumbrance¹. As of 31 December 2022, casino, gaming and gaming support areas covering about 136,000 square meters, with a total net book value of MOP 6,051,300,000, plus gaming equipment, vested in the government and are now owned by it¹. VML continues to recognize those assets as property and equipment and to depreciate them¹.

The year covered by the report was dominated by pandemic disruption. Casinos resumed with no more than 50 percent of casino staff working at any one time¹.

What it means for players

The extension kept VML's casinos operating under the old subconcession framework until the end of 2022, when the new concession took over¹. For anyone gambling in Macau, the practical effect was continuity of operations rather than a change in the games on offer. The report notes that all social distancing requirements, including reduced numbers of gaming table seats and activated slot machines compared with pre-COVID-19 levels, were lifted in early January 2023¹. The report states that the timing and manner of a full return to normal operations at its casinos, restaurants and shopping centers will be assessed gradually according to business volumes¹.

What happens next

The report gives no further dated steps beyond those already recorded: the six concessions were awarded, the bank guarantees were released in January 2023, and the social distancing requirements were canceled in early January 2023¹. VML states that it will continue to operate the vested gaming assets in the same manner as under the previous subconcession and assumes it will be awarded a new concession on expiry¹. The report adds that the duration and severity of the pandemic and its related effects remain uncertain, and that the potential future impact on the company's results, cash flows and financial position cannot be determined¹.

For background on how Macau licenses casino operators, see Gambling Regulators and Licenses in Asia: Who Licenses What and How to Check. For the market itself, see Can I Gamble in Macau?.