Macau moguls’ $6 bln relief rally is punchy

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Fireworks explode over Parisian Macao as part of the Las Vegas Sands development during its opening ceremony in Macau, China September 13, 2016. REUTERS/Bobby Yip

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HONG KONG, Jan 17 (Reuters Breakingviews) - Macau will offer six 10-year casino concessions read more when licences expire later this year – enough for all the current holders to extend their stay in the world’s largest gambling hub. Investors sent shares of the four New York-listed operators, Wynn Resorts (WYNN.O), Melco Resorts and Entertainment , MGM International , and Las Vegas Sands , up an average 10% on Friday, adding about $6 billion to their market value – equivalent to the combined annual EBITDA from their Macau operations before Covid-19 all but shuttered casinos in the enclave.

Sure, it frees the six operators from fears authorities would reduce the quota but there is no guarantee that the current holders will win the rebidding process. If they do win, they may have to dig deep into their pockets: In Singapore, for example, two casino operators committed to investments of almost $7 billion to secure concessions. Another unknown is how Macau will recover as China doubles down on its zero-Covid policy. There are no signs of easing convoluted border controls, and Macau tightened restrictions again on Saturday. Relief may be short-lived. (By Katrina Hamlin)

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Editing by Una Galani and Thomas Shum

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