After an extended period of betting operation decline, the 24-year concession granted by the Macau government to Macau Jockey Club (MJC) in 2018 will now be terminated. As reported, the Government will terminate the concession as of 1 April 2024 and take over the venue and facilities of MJC without compensation after the initial five-year period of the concessionaire’s operations has incurred the loss of around $260 million.
24-Year Concession:
As Inside Asian Gaming (IAG) reports, the MJC has already assigned all the necessary powers to governmental authorities of the Special Administrative Region of Macau to complete the transaction. The termination reportedly comes after the MJC entered an agreement with the SAR government in 2018 for a period of 24 years and six months. According to IAG, the contract obliged the MJC to funnel around $186 million to the SAR after the initial five-year period of the contract performance, but it seems that the concessionaire facing operating difficulties may not be likely to provide capital injections under the agreement.
Terminating Horse Racing Operations:
The Secretary for Administration and Justice, Cheong Weng Chon, reportedly explained: “The Macau Jockey Club proposed to the government to terminate the horse racing contract in 2023 due to operational difficulties and an inability to meet the needs of society. The government has conducted an in-depth study and accepted the Jockey Club’s opinion.”
As reported by IAG, Cheong also said that the government would not proceed with any horse racing or other gaming operations on the original land as it didn’t see any long-term benefit from these. He reportedly said:“The attraction of horse racing continues to diminish, with average race day attendance of 701 in 2021 falling to 492 in 2023. Annual attendance dropped from 38,000 in 2020 to only 29,000 in 2023.”
$260 Million Loss:
Attendance decline impacted the scope of betting operations, with the MJC reporting accumulated losses of US$260 million for the financial year ending on 30 June 2023. The figure also represented a $25 million loss increase over the preceding 12 months, according to the source, therefore not seeming likely to meet the contractual deadlines. Still, the MJC will reportedly follow the agreement with Macau government to transfer all 289 horses to mainland China by the stipulated 31 March 2025 deadline. Any non-performance or default is reportedly subject to penalties.
Handing Over the Property:
The concessionaire will also hand over the property to the government without compensation and handle the rights and interests of its staff. The Director of the Macau Labor Affairs Bureau Wong Chi Hong, reportedly said: “The Jockey Club has 254 local employees, and the company has promised to carry out the termination compensation in accordance with the law. The shareholders of the Jockey Club have also indicated that other companies [linked to] shareholders are willing to absorb the staff concerned and make career referrals for them.”
As IAG reports, DICJ director Adriano Marques Ho said that the Macau Jockey Club has fulfilled its payment and contribution obligations under the concession despite the termination pending effect from 1 April 2024.
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