Macau gaming operators commit MOP9 billion to Government Guidance Fund

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Macau casino ops to commit MOP9 billion to Government Guidance Fund

By Tony Lai

Macau's six casino operators will contribute a combined MOP9 billion (US$1.12 billion) to a government-backed investment fund aimed at diversifying the city's economy from gaming and strengthening its integration with Hengqin and the Guangdong-Hong Kong-Macau Greater Bay Area.

The commitments will increase the Macau Government Guidance Fund's total capital to MOP20 billion in the first stage, including MOP11 billion patacas allocated from the city's fiscal reserves.

The agreements were signed Friday at a ceremony attended by representatives of the Macau government, the Chinese liaison office in the city and the six operators.

Each gaming operator will serve as a limited partner in the fund, which was established earlier this year, and contribute a different amount, according to their respective filings with the Hong Kong stock exchange on Friday.

Sands China will provide MOP2.3 billion, or 25.6 percent of the operators' combined contribution, while Galaxy Entertainment Group will invest MOP2.27 billion, or 25.2 percent. Wynn Macau will contribute about MOP1.37 billion, representing 15.2 percent, and MGM China Holdings will provide MOP1.24 billion, or 13.8 percent.

SJM Holdings will commit MOP992.7 million, equivalent to 11 percent, while Melco Resorts & Entertainment will contribute MOP828 million, or 9.2 percent.

The commitments were the result of “amicable negotiations between the Macau government and the six companies,” Macau Secretary for Economy and Finance Ng Wai Han said at the ceremony.

"The six companies responded positively and took the initiative to participate and cooperate, demonstrating their support for the Macau government's policies through concrete action," Ng said. "This reflects the spirit of collaboration between the government and private businesses, as well as the business community's firm confidence in Macau's future development."

Non-gaming investments under concessions

The signing of the agreements marks the formal launch of the guidance fund, she added.

The contributions will count toward the operators' non-gaming investment commitments under their current casino concessions and will be made in stages in accordance with the agreements, according to their filings.

Macau's six gaming operators initially committed to investing a combined MOP108.8 billion in non-gaming projects in the city under their 10-year concessions, which run from 2023 through 2032. That amount was increased by 20 percent to about MOP130.4 billion after the city's gross gaming revenue exceeded MOP180 billion in 2023.

Ng added the gaming operators have played an important role in developing Macau as a global tourism and leisure destination while continuing to meet their contractual obligations to invest outside the gaming sector.

"They have also continued to fulfill their commitments under their concession contracts to invest in non-gaming projects, contributing to Macau's appropriately diversified economic development," she said.

Patient capital

The guidance fund will operate under a “patient capital” model, prioritizing long-term industrial development and social benefits over short-term financial returns. It will target emerging non-gaming industries under Macau's “1+4” economic diversification strategy, including financial services, technology, health care and life sciences.

"Industrial upgrading, technological innovation and the commercialization of research require substantial, long-term capital investment," Ng said. "Through fund-based investments and market-oriented management, the fund will mobilize private capital and harness the combined strengths of public policy and market forces to foster Macau's emerging and future industries."

The government is also seeking additional private sector participants and investments that can contribute to the MOP20-billion fund and the city's development.

"The Macau government welcomes greater participation from capable and committed private investors that share the city's development vision," Ng said. "We also invite high-quality fund managers, technology companies and innovative projects to establish a presence in Macau and the Guangdong-Macau In-Depth Cooperation Zone in Hengqin."

The guidance fund has an initial term of 15 years, including a five-year investment period, according to MGM China's filing.

The government established Macau Investment and Management Company Limited earlier this year to oversee the fund's day-to-day operations. A steering committee chaired by Macau Chief Executive Sam Hou Fai will provide advice on long-term strategy, priority industries, annual plans, the selection of fund managers and major investments.

The Friday agreements were signed separately by the investment management company and each casino operator. Sam and Zheng Xincong, director of the central government's liaison office in Macau, attended the ceremony alongside Ng.

Representatives of the operators included Pansy Ho Chiu King, chairperson and executive director of MGM China Holdings; Philip Cheng Yee Sing, director of Galaxy Entertainment Group; Sun Minqi, executive vice president and chief financial officer of Sands China; Lawrence Ho Yau Lung, chairman and chief executive officer of Melco Resorts & Entertainment; Linda Chen, president and vice chairman of Wynn Macau; and Timothy Fok Tsun Ting, co-chairman and executive director of SJM Holdings.

https://macaubusiness.com/macau-casino-ops-to-commit-mop9-billion-to-government-guidance-fund/