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Melco Resorts and Entertainment Ltd ADR MLCO

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The Draft of Macao Regulatory Changes Removes Many of the Overhanging Concerns on Casino Licenses

Jennifer Song Senior Equity Analyst

Analyst Note

| Jennifer Song |

Macao’s gaming law draft of a maximum of six casino licenses and a 10-year concession period with a possibility for a three-year extension is largely in line with the summary of the consultation paper on the revision of the Macao gaming laws of September 2021, which confirmed our view that all the six existing gaming licenses would be renewed. In addition, we think the removal of the requirements on preapproval of dividend distribution and appointment of government representatives are also the key positives, removing the overhanging concerns over casino operators’ independence, and helping to boost casino operators’ confidence in Macao and the gaming sector’s long-term prospects.

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Company Profile

Business Description

Melco Resorts is one of only six companies with a licence to operate casinos in Macao, the only region in China with legalized gambling. It operates Altira, a complex focused on VIP customers; City of Dreams, an integrated resort in Cotai serving both mass-market and premium-end patrons; and Mocha Clubs electronic gaming machines. In addition, the company also has a majority interest in Studio City, a new casino in Cotai that opened in October 2015. Outside Macao, Melco also owns City of Dreams Manila in Philippines, and 75% stake in City of Dreams Mediterranean in Cyprus. The business mix in term of adjusted EBITDA was about 84% from Macao, and the rest largely from Philippines as of 2019.

Contact
60 Wyndham Street, 36th Floor, The Centrium
Hong Kong, Hong Kong
T +852 25983600
Sector Consumer Cyclical
Industry Resorts & Casinos
Most Recent Earnings Sep 30, 2021
Fiscal Year End Dec 31, 2021
Stock Type
Employees 19,746

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