Macau has finally taken a first step toward acting responsibly on gaming concession expirations, though the major items concerning expiration remain absolutely unclear. On Friday, the government announced it has extended the concession of SJM Holdings and subconcession of MGM China to June 26, 2022, aligning them with the expiration of privileges for the other four casino operators. What happens after that date is still anybody’s guess.

Concessions for SJM and MGM were due to expire in March of next year, and the extension virtually eliminates the possibility that SJM’s concession could expire before it opens much delayed US$4.6 billion Grand Lisboa Palace in Cotai, now scheduled to open late this year. Ironically, first to expire SJM and MGM, which opened MGM Cotai in February last year, are the last concessionaires to establish Cotai outposts.

The extensions have been widely expected, though the announcement timing is a surprise. Speculation was that the authorities would wait until Macau’s next chief executive had been chosen. The small circle election to select Fernando Chui Sai-on’s successor won’t take place before mid-August, though the new CE’s identity could be clear before then.

Since the new CE would preside over concession expiry, the expectation was they would make the call on any extensions. Announcing extensions now gives MGM and SJM a full three years-plus of certainty and demonstrates at a modicum of officials understanding about the difficulties of having major businesses (and employers) in limbo.

The two concessionaires will each pay 200 million Macau patacas (MOP; US$25 million) to the government for the 27 month extension. Union Gaming managing director in Macau Grant Govertsen suggests the figure gives a baseline for the cost of new concessions. His back of the envelope calculations suggest a new ten year concession could run US$264 million.

Still, the extension leaves most of the mystery intact surrounding expiration of Macau’s casino concessions, the first 20 year licenses granted under casino liberalization that ended Stanley Ho’s 40 year monopoly. The current law calls for “re-tendering” of concessions, which many interpret as a repeat of the opening bidding process Macau undertook in 2001. That global process awarded three concessions, to incumbent SJM, Wynn Resorts and the partnership of Galaxy Entertainment and Las Vegas Sands.

When Galaxy and LVS failed to reach a partnership agreement, the government came up with the subconcession solution, allowing each partner to operate independently and eventually granting the other concessionaires a subconcession to sell, MGM (and Pansy Ho) buying SJM’s, Lawrence Ho’s Melco and erstwhile partner Jame Packer’s Crown Resorts buying the other.

For the next re-tendering, the authorities could rewrite the rules to make it unlikely for anyone but current casino operators to win. Others see the extensions as the first step in an extensive exercise in delays. Union Gaming’s Govertsen expects the new government will undertake a multiyear study on gaming concessions that could necessitate a set of multiyear extensions for all concessionaires. Letting time pass will also allow companies to know who has won Japan IR licenses, follow the Pansy Ho-SJM drama and watch less exciting cross-ownership issues with Galaxy and Wynn, perhaps leaving some of the six current slots available to a new operator.

Whatever the timing, it’s a good bet Macau authorities will act with minimal transparency and complicated, unarticulated motives. Friday’s extension reminds observers that, at some point, they will act.