WYNMF - Citi sees Macau casino licenses staying with incumbents

Despite the efforts of Malaysia-based Genting Group ( OTCPK:GEBHF ) ( OTCPK:GIGNF ) ( OTCPK:GIGNY ), Citi analyst George Choi sees slim chances of Macau casino licenses shifting hands.c

“Macau already has six of the best casino operators in the world, evidenced by their massive contributions to Macau over the past two decades,” he advised clients. “Genting Group has its own strengths, but we don’t think it offers any unique attributes that would persuade authorities to make a change.”

Current casino operators in the region are Wynn Macau ( OTCPK:WYNMF ), Sands China ( OTCPK:SCHYY ), MGM China ( OTCPK:MCHVF ), SJM Holdings ( OTCPK:SJMHF ), Galaxy Entertainment ( OTCPK:GXYEF ). and Melco Resorts ( NASDAQ: MLCO ). While Genting was considered a formidable challenger for a license, Choi voiced his belief that the government of the Special Administrative Region are likely to be risk-averse and keep the casino landscape as is.

“Following the decline of junkets , as well as Covid impacts, we believe the Macau government needs stable and healthy development of the mass-market gaming business more than ever,” he explained. “The six incumbents appear best positioned to assist the government to achieve this goal with the least risk.”

To be sure, SJM Holdings ( OTCPK:SJMHY ) has come under scrutiny for its weak balance sheet as of late. Indeed, Fitch downgraded the operator’s credit rating to BB- in June.

Read more on major catalysts to watch in Macau .

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