Melco Resorts & Entertainment Limited (MLCO): PESTLE Analysis [Nov-2025 Updated]

If you're tracking Melco Resorts & Entertainment Limited (MLCO), your focus for the 2025 fiscal year should be laser-sharp on two major pivots: the strict new Macau concession rules and the successful launch of City of Dreams Mediterranean in Cyprus. The political landscape in Macau now demands a massive non-gaming investment of roughly $1.48 billion (MOP 11.88 billion) by 2032, which is a huge capital expenditure challenge but also the key to future mass-market growth. This PESTLE breakdown shows you exactly how geopolitical tensions, shifting consumer demands for integrated resorts, and new legal requirements-like mandatory government approval for certain dividend distributions-are creating both near-term risk and long-term opportunity for Melco. It's a high-stakes bet, and we need to see if their defintely aggressive diversification pays off.

Melco Resorts & Entertainment Limited (MLCO) - PESTLE Analysis: Political factors

The political landscape for Melco Resorts & Entertainment Limited is defined by the Macau government's stringent new regulatory regime, which has fundamentally shifted the operating model from a concession-based system to one of high-stakes compliance and mandated economic diversification.

You need to accept that the Macau Special Administrative Region (SAR) government is now a direct, active partner in your business strategy, particularly regarding non-gaming investment and local control. This is a permanent change.

Macau government holds increased oversight on operations

The Macau government, through the Gaming Inspection and Coordination Bureau (DICJ), now exercises significantly greater oversight, a clear political signal that the era of minimal intervention is over. The new gaming law, Law no. 16/2022, grants the local regulator substantial enforcement powers, ranging from heavy fines to concession termination. This increased scrutiny is evident in the government's 2025 plan to conduct a midterm review of the casino operators' non-gaming investment progress. They are defintely watching to ensure compliance with the city's economic diversification strategy.

This political environment requires Melco Resorts & Entertainment Limited to maintain an exceptionally clean compliance record, especially concerning anti-money laundering and illegal gambling. The government's focus is on ensuring the healthy and orderly development of the gaming industry, a goal that directly ties into the stability of the Macau SAR and the People's Republic of China.

New 10-year concession requires local directors on the board

The new 10-year concession, which began on January 1, 2023, is structured to ensure local control and commitment. The most critical political requirement is the mandate for the Managing Director of Melco Resorts (Macau) S.A. to be a permanent resident of the Macau SAR and to hold at least 15% of the registered share capital of the concessionaire. This ensures local interests are directly tied to the company's success and compliance.

The concession also imposes a strict financial floor, requiring the registered share capital and net asset value of the local operating entity to be no less than MOP$5 billion (approximately US$625 million). That's a significant capital commitment designed to ensure financial stability and local accountability.

Geopolitical tensions between US and China create market uncertainty

As a US-listed company, Melco Resorts & Entertainment Limited (MLCO) is exposed to the ongoing geopolitical tensions between the United States and China, which creates a layer of market uncertainty. While the Macau gaming sector is primarily focused on mainland Chinese visitors, heightened US-China trade and diplomatic friction can indirectly affect consumer confidence and tourism flows. Financial research firm CreditSights noted in April 2025 that the escalating tariff war, which saw US President Donald Trump raise tariffs on Chinese imports, could cause bond volatility for US-linked Macau operators, even if the fundamental business impact is limited. The risk is less about direct retaliation and more about secondary effects from a global economic slowdown impacting the mainland Chinese consumer.

The political risk is that a further deterioration in relations could lead to increased regulatory scrutiny from Beijing or Washington, though Fitch Ratings stated in April 2025 that a scenario where US operators are compelled to sell their Macau operations is 'highly unlikely' in the near-term forecast horizon.

Strict regulatory compliance is mandatory to maintain the concession

The new concession mandates a clear shift away from pure gaming revenue towards economic diversification, backed by substantial, non-negotiable investment commitments. Melco Resorts & Entertainment Limited has pledged a total investment of MOP$11.8 billion (US$1.5 billion) over the 10-year concession period (2023-2032). This is the cost of doing business now.

Here's the quick math on the investment and compliance requirements:

The bulk of the investment, MOP$10.0 billion, is earmarked for non-gaming elements like MICE (Meetings, Incentives, Conferences, and Exhibitions), entertainment, and cultural projects. Furthermore, Melco Resorts & Entertainment Limited is actively complying with the new law that requires concessionaires to own the premises where gaming activities take place. This has led to the closure of satellite casinos like the Grand Dragon Casino and several Mocha Clubs before the end of 2025, with assets and employees being reassigned to core properties. This is a clear, costly action driven entirely by political and legal compliance.

• Meet the MOP$10.0 billion non-gaming investment target.
• Ensure the Managing Director holds 15% local share capital.
• Complete the closure of all non-compliant satellite venues by the December 2025 deadline.

Melco Resorts & Entertainment Limited (MLCO) - PESTLE Analysis: Economic factors

Mandated non-gaming investment of approximately MOP 11.88 billion (around $1.48 billion) by 2032.

The new Macau gaming concession requires Melco Resorts & Entertainment Limited to make a substantial capital commitment to non-gaming development, fundamentally reshaping its economic model. The company's total committed investment over the 10-year concession period (2023-2032) is approximately MOP 11.8 billion, which translates to about US$1.5 billion. Of this, the vast majority-around MOP 10.0 billion (approximately US$1.3 billion)-is earmarked specifically for non-gaming initiatives like entertainment, cultural projects, and attracting foreign visitors. This is a direct, long-term economic pressure that shifts capital expenditure away from core gaming operations and into higher-risk, lower-margin ventures like MICE (Meetings, Incentives, Conventions, and Exhibitions) and entertainment. It forces a change in the revenue mix.

Here's the quick math on the non-gaming focus:

• Total Concession Investment (2023-2032): MOP 11.8 billion (approx. US$1.5 billion)
• Allocated to Non-Gaming: MOP 10.0 billion (approx. US$1.3 billion)
• Percentage of Total Investment on Non-Gaming: ~85%

The goal is to drive non-gaming revenue to a significantly higher percentage of Macau's GDP by 2028. Melco is responding with projects like the successful re-launch of the 'House of Dancing Water' in May 2025, which has already boosted non-gaming income. The challenge is that non-gaming revenue historically contributed less than 10% of Macau's GDP in 2019. That's a huge gap to close.

Macau's gross gaming revenue (GGR) recovery post-pandemic is uneven.

Macau's GGR recovery in the 2025 fiscal year has been robust but structurally uneven, a critical factor for Melco's core profitability. The Macau government initially projected 2025 GGR at MOP 240 billion (about US$29.7 billion), though this was later revised to MOP 228 billion. However, strong performance, particularly in Q2 and Q3 2025, has analysts like CLSA projecting GGR to hit US$30.1 billion for the year.

The unevenness is starkly visible in the segment split:

The mass market is the engine now, showing greater resilience. Melco's mass-only property, Studio City, reported a 12% year-on-year growth in mass GGR in Q3 2025, which is a clear positive. Conversely, the VIP segment's decline, due to the crackdown on junket operators, means the overall GGR recovery rate is still only around 82.1% of the pre-pandemic 2019 GGR of MOP 292.46 billion.

Global interest rate environment impacts debt servicing costs.

The elevated global interest rate environment directly impacts Melco's significant debt load, increasing the cost of capital and debt servicing. As of September 30, 2025, the company's total debt, net of financing adjustments, stood at US$7.35 billion. While the company is focused on deleveraging, with total debt decreasing from US$8.45 billion in Q4 2022, the debt burden remains high.

Melco is actively managing this risk through refinancing, but the cost is clear:

• In September 2025, Melco Resorts Finance priced US$500 million in new senior notes at a 6.500% coupon due 2033.
• The proceeds were primarily intended to fund a tender offer for its outstanding 5.250% senior notes due 2026.
• This refinancing locks in a higher interest rate for a longer term, reflecting the current higher-rate environment.

The company has also used interest rate swaps to lock in rates on some of its revolving credit facilities (RCFs) drawn in Hong Kong dollars, aiming for lower rates than its maturing bonds. Still, the high net debt of US$6.06 billion (as of May 2024) means interest expense is a major P&L line item that will continue to be a headwind until rates fall or debt is paid down significantly.

Diversification into new markets like Cyprus stabilizes revenue streams.

Melco's strategic diversification into new markets, particularly with City of Dreams Mediterranean in Cyprus, is starting to provide a measurable stabilizing effect on overall revenue. This is defintely a key component of their risk management strategy.

The Cyprus operations achieved their best quarter since opening in Q3 2025, demonstrating strong ramp-up momentum:

• Total GGR climbed 35% year-on-year in Q3 2025 to US$78 million.
• Adjusted EBITDA for the Cyprus operations surged 53% quarter-over-quarter to US$23 million in Q3 2025.

This growth provides a much-needed non-Macau revenue source, mitigating the concentration risk inherent in the Macau market. The new City of Dreams Sri Lanka, which opened in August 2025, also contributed US$6.1 million in revenue in its initial phase, further signaling a commitment to geographic diversification. This strategy is crucial, as it builds a revenue base less susceptible to the regulatory and travel volatility of a single region.

Melco Resorts & Entertainment Limited (MLCO) - PESTLE Analysis: Social factors

The social landscape in Macau has fundamentally changed, moving Melco Resorts & Entertainment Limited (MLCO) from a high-roller focus to a mass-market, experience-driven model. This shift is not just a preference but a government-mandated structural change that directly impacts revenue streams, labor strategy, and capital expenditure (CapEx).

Shift in Macau focus from VIP to mass market and international visitors

The social and regulatory pivot away from VIP (Very Important Person) gambling has made the mass market the new core driver of Macau's Gross Gaming Revenue (GGR). In the first quarter of 2025, the mass-market segment contributed a historic high of approximately 75% of Macau's total GGR. This is a stark contrast to the pre-pandemic era where VIP revenue dominated. For Melco, this trend is clear in its 2025 performance. At the flagship City of Dreams Macau in Q3 2025, mass GGR reached $494 million, significantly outpacing the VIP GGR of $206 million. Studio City, which is a mass-only property, saw its mass GGR grow to $312 million in Q3 2025. This means your revenue stability now rests on the spending power and visitation consistency of the Chinese middle class, not the high-stakes play of a few individuals.

The premium mass segment, which consists of affluent tourists who do not use junket operators, now accounts for approximately 45% of total mass revenue, indicating a focus on higher-value non-VIP customers. This demographic prioritizes experiential travel over transactional gambling, which is a key social trend Melco must defintely cater to.

Increased demand for non-gaming offerings like entertainment and retail

The Macau government's push for economic diversification, a direct response to social and political pressures, has intensified the demand for non-gaming elements. Operators are now required to invest a significant portion of their CapEx into non-gaming projects. Melco's focus on this is evident in its financial results: consolidated non-gaming revenue for Q3 2025 was $248 million, a solid 7.5% increase year-on-year. This non-gaming revenue comprised about 18.9% of the company's total operating revenues of $1.31 billion for the quarter.

The strategic value of these offerings is substantial. For example, the successful return of the House of Dancing Water show at City of Dreams is projected to boost daily foot traffic by an additional 4,000 visitors. This foot traffic is crucial for driving retail and dining sales, which are less volatile than gaming revenue. Here's the quick math on Q3 2025 revenue distribution:

Labor market constraints in Macau require higher wages and benefits

Macau's tightly controlled labor market presents a persistent constraint on Melco's operations, particularly as the company pivots to a service-intensive integrated resort model. Labor policies mandate that frontline positions like croupiers, taxi drivers, and bus drivers must be held by Macau residents, creating a limited talent pool. Foreign businesses operating in the city cite a constant shortage of skilled workers in the emerging non-gaming sectors as a top constraint on expansion. The city's unemployment rate was extremely low at 1.7% as of late 2024, indicating a tight market where labor has leverage.

This constraint directly translates to rising labor costs. The average monthly earnings (excluding irregular remuneration) for full-time staff in Macau's gaming sector reached MOP27,390 (US$3,402) in Q2 2025, marking a 2.4% increase year-on-year. For directors and managers, the pay rise was even more significant, climbing 2.8% year-on-year to an average of MOP67,590 (US$8,400) per month. You are paying more for a limited, highly localized workforce. The total gaming sector employment was approximately 68,900 people by the end of September 2025, a decline of 3.6% year-on-year, which further tightens the labor supply.

Growing preference for integrated resort experiences over pure gambling

The social preference is for a holistic, integrated resort (IR) experience-a destination in itself-rather than just a casino. This is a critical factor for Melco's long-term concession viability and profitability. The mass-market customer, particularly from the Chinese middle class, is seeking diversified entertainment, luxury retail, and MICE (Meetings, Incentives, Conferences, and Exhibitions) facilities. Melco is responding with significant capital investments and new offerings:

• Launching new non-gaming attractions like the revamped House of Dancing Water show.
• Focusing on premium-mass customers who value high-end accommodations and service.
• Expanding geographically, like the opening of City of Dreams Sri Lanka in Q3 2025, to diversify the IR footprint.

This trend means that the quality of your hotels, restaurants, and entertainment-the non-gaming product-is now as important as your gaming floor. Melco's Macau Property EBITDA improved by 21% year-over-year in Q3 2025, a result that underscores the success of integrating these non-gaming offerings with the core business.

Melco Resorts & Entertainment Limited (MLCO) - PESTLE Analysis: Technological factors

You need to see where Melco Resorts & Entertainment Limited is putting its capital to drive both efficiency and the premium customer experience. The clear takeaway for 2025 is that technology investment is heavily focused on the gaming floor for regulatory compliance and data capture, plus high-end non-gaming amenities to boost visitation and non-gaming revenue.

The company's Q1 2025 Capital expenditures (CapEx) totaled US$97.4 million, with a significant portion allocated to enhancement projects in Macau, which includes these core technological upgrades. This isn't just maintenance; it's a strategic push to capture the high-value mass market. It's defintely a smart move to prioritize technology that directly impacts the bottom line and regulatory standing.

Investment in advanced digital payment systems for seamless transactions

In 2025, the most impactful digital transaction technology for Melco Resorts has been the full deployment of smart gaming tables, not just consumer-facing mobile payments. These tables use Radio-Frequency Identification (RFID) technology to track every chip and transaction in real-time. This is a crucial step for both security and regulatory compliance in Macau, where all baccarat tables were converted to smart tables by the end of March 2025.

This deployment shortens the time it takes for players to move into the actual gaming space, making the experience feel more seamless and less cumbersome. It also provides an immediate, verifiable digital trail for all gaming transactions, which is non-negotiable under the new Macau gaming concession terms. This is how you automate compliance and get real-time data at the same time.

Use of data analytics to optimize customer loyalty programs and marketing

The core purpose of the smart table rollout is data analytics. The technology allows Melco Resorts to gather granular data on player behavior, which is then used to 'further refine our approach to marketing and player reinvestment.' This data-driven approach is key to improving margins, especially as the company reevaluates its player reinvestment strategy from where it was in 2024.

We are already seeing results. The two top-tier segments within the company's 'Signature Club' loyalty program reported an increase in the number of players month-on-month as of August 2025. This targeted approach, supported by analytics, is a major factor in the Macau property Adjusted EBITDA growing 35% year-over-year in Q2 2025.

Adoption of smart room technology to enhance guest experience

Melco Resorts is strategically using technology to elevate its non-gaming offerings and drive high-value visitation. The renovation of the Countdown Hotel at City of Dreams Macau into a new all-suite tower is a prime example of a premium-focused, non-gaming technology investment. This project will convert 330 standard rooms into approximately 150 high-end luxury suites, each averaging in excess of 1,000 square feet.

Beyond luxury space, technology is used for sustainability and entertainment:

• Sustainability Tech: Implemented the NORDAQ water filtration system in guest rooms, avoiding the use of 16.5 million single-use plastic bottles since the program started.
• Entertainment Tech: New premium player areas feature high-tech non-gaming amenities like golf and race simulators.
• Mobile Integration: The new mobile app allows guests to interact with the loyalty club and access services like dining and show tickets, creating a single digital ecosystem.

Enhanced surveillance and security systems to meet regulatory standards

The most significant security enhancement in 2025 is the mandatory, technology-driven upgrade of the gaming floor. The full deployment of RFID-enabled smart tables by March 2025 is not just for efficiency; it is a critical security and surveillance measure mandated by Macau regulators.

On the digital side, the company relies on robust cloud infrastructure, utilizing AWS security tools like Guard Duty and the Web Application Firewall (WAF) to ensure the integrity and security of its entire digital platform. This is standard for a global operator, but it's a necessary, continuous operational expenditure to protect customer data and financial systems. The biggest risk here is always a cyber breach, so this back-end investment is non-negotiable.

Melco Resorts & Entertainment Limited (MLCO) - PESTLE Analysis: Legal factors

New Macau Gaming Law (2022) imposes tighter controls on concessionaires.

The new Macau Gaming Law, enacted in 2022, fundamentally reshaped the operating environment, placing significantly tighter controls on concessionaires like Melco Resorts & Entertainment Limited. This shift is designed to enhance government oversight, strengthen national security, and force economic diversification. A major legal hurdle for Melco is the mandate that all casino operations must be conducted on properties owned by the licensed concessionaire, effectively ending the revenue-sharing model with third-party satellite casinos.

This requirement has a clear, near-term impact: Melco is required to cease operations at its satellite properties, including the Grand Dragon Casino and three Mocha Clubs, before the transition period concludes on December 31, 2025. The government is now actively reviewing the concessionaires' investment commitments for the 2023-2025 period, ensuring compliance with the pledged total investment of MOP118.8 billion (approximately US$14.8 billion) across all six operators over the 10-year term. Simply put, Melco must show it's spending the money it promised on non-gaming projects.

The law also establishes a new financial floor for concessionaires, increasing the minimum share capital requirement to MOP5 billion (approximately US$625 million), a substantial increase from the previous threshold. This is a clear move to ensure financial stability and accountability across the sector.

Mandatory government approval for dividend distribution above a set threshold.

While the most stringent proposal-requiring mandatory government approval for all dividend distributions-was ultimately not included in the final 2022 Gaming Law, the government still maintains powerful financial control mechanisms that affect shareholder returns. The initial proposal caused significant market apprehension, but the final law opted for indirect control, which is still a major legal constraint on capital allocation.

The government's authority to block the public subscription of concessionaire shares and the issuance of bonds or preferential stock gives them a veto power over major capital-raising and restructuring decisions. This means that while Melco Resorts & Entertainment Limited does not need a specific government sign-off for every dividend check, any significant capital event that might impact the company's ability to meet its MOP118.8 billion investment pledges is under direct government scrutiny. It's a control mechanism that prioritizes Macau's long-term non-gaming development over immediate shareholder payouts.

Licensing and operational compliance for City of Dreams Mediterranean in Cyprus.

Melco's European expansion, City of Dreams Mediterranean in Cyprus, operates under a distinct legal framework. The resort holds a 30-year casino gaming license, which commenced in June 2017, with the crucial first 15 years being exclusive to the resort and its satellite casinos. This exclusivity provides a significant competitive advantage, but it is contingent on strict adherence to the licensing terms.

Melco Resorts & Entertainment Limited holds a 75% equity interest in ICR Cyprus, the consortium operating the resort. Operational compliance extends beyond gaming, encompassing environmental and ecological conditions due to the resort's proximity to the Akrotiri Salt Lake, a protected wetland. For the second quarter of 2025, the Cyprus operations, including the satellite casinos, generated total operating revenues of US$72.3 million and Adjusted EBITDA of US$12.4 million, demonstrating the financial weight of maintaining this complex compliance structure.

Strict anti-money laundering (AML) regulations require robust controls.

The gaming industry is inherently high-risk for money laundering (AML), and Melco operates under increasingly strict regulatory regimes in both Macau and Cyprus. Macau's Law to Combat Gambling Crimes was amended in October 2024 (Law no. 20/2024) to criminalize unlicensed money exchange within casino premises, a direct response to illicit capital flight and associated crime.

The penalty for operating an unlicensed exchange is severe, including up to five years of imprisonment and a ban from entering Macau casinos for two to 10 years. The immediate impact of this crackdown was visible in Q1 2025, where gaming-related crime incidents rose 61.5% (to 567 reports) as authorities targeted these illicit networks. This heightened enforcement environment forces Melco to invest heavily in its compliance infrastructure.

The company's internal controls are robust, as mandated by the Financial Intelligence Office (GIF) and international standards. This includes:

• Mandatory filing of Suspicious Transaction Reports (STRs), which reached a record 3,837 in 2024 across the Macau industry, an 11.8% year-on-year increase.
• A formal Code of Business Conduct & Ethics that explicitly covers anti-money laundering and terrorist financing.
• Annual certification and mandatory training for all key personnel, including directors and senior executives, to ensure they understand their reporting obligations.

Here's the quick math: managing this regulatory risk is a core operational cost, but failure to comply carries a much higher price in fines, license risk, and reputational damage. Your next step is to ensure your internal audit team has quantified the full-year 2025 AML compliance expenditure and its impact on the Macau property EBITDA margin.

Melco Resorts & Entertainment Limited (MLCO) - PESTLE Analysis: Environmental factors

You're looking at Melco Resorts & Entertainment Limited (MLCO) and need to understand the real environmental risks and the cost of compliance, especially in Macau. The core takeaway is that Melco is ahead of the curve on ESG reporting and building standards, which reduces regulatory risk but significantly increases near-term capital expenditure (CapEx). They've already tied their future to a 2030 carbon-neutral goal, so this isn't a side project; it's a core operational cost.

Pressure to meet Macau's carbon neutrality goals and reduce energy use

The pressure from Macau's government and global investors to decarbonize is real and accelerating. Melco's commitment is to operate carbon-neutral resorts globally by 2030. This is an aggressive target that requires immediate, heavy investment in energy efficiency measures (EEMs) and renewable energy. Since 2018, these EEMs have already delivered annualized savings of over 62.5 million kWh, which is a 9% increase in savings over the 2023 fiscal year. That's a massive operational win, but the initial investment is substantial.

Their roadmap includes a specific goal for a 5% tCO2e/m2 intensity reduction in Scope 1 and 2 greenhouse gas (GHG) emissions by 2030, with an ambition for a 22% reduction at the property level. They are actively mitigating transition risk-the risk of new carbon pricing-by moving away from fossil fuels. It's a smart move to front-load this CapEx.

Here's the quick math on their renewable energy efforts:

• Installed over 25,000 photovoltaic (PV) panels across their properties.
• These panels generate close to 10,000 MWh annually.
• The goal is a 3% kWh/m2 intensity reduction in fuel and electricity consumption by 2030 across the Group.

Focus on sustainable building design and operations at new resorts

Sustainable design is now a mandatory part of any major capital project in Macau, and Melco has set the bar high. Their Studio City Phase II development, for instance, achieved a Building Research Establishment Environmental Assessment Method (BREEAM) "Excellent" rating for New Construction. This was the first BREEAM-certified project in Macau, which gives them a competitive edge in demonstrating compliance with the government's push for a greener tourism model.

This focus extends to existing properties, too. Several of their Macau resorts-Studio City, Nuwa, Morpheus, and The Countdown-have earned prestigious Green Key and Green Hotel Awards. This isn't just about a plaque; it shows a commitment to operational efficiency that directly impacts the bottom line through lower utility costs.

Reporting requirements for environmental, social, and governance (ESG) metrics

The regulatory environment, coupled with investor demand, makes transparent ESG reporting a critical function. Melco is defintely taking this seriously, aligning their strategy and disclosures with the Task Force on Climate-related Financial Disclosures (TCFD) framework and preparing for the new International Financial Reporting Standards (IFRS) S1 and S2 standards.

In terms of external validation, they were named an Industry Mover in the S&P Global Sustainability Yearbook 2025, scoring in the 93rd percentile of the Casinos & Gaming industry. They also received a Carbon Disclosure Project (CDP) score of 'B' for Climate and 'B' for Water. This high-level reporting is crucial for attracting institutional capital and managing reputation risk with the Macau government.

Water conservation efforts are critical in resource-scarce operating regions

Water scarcity is a major physical risk in a densely populated, coastal region like Macau, so conservation efforts are a financial and operational necessity. Melco has prioritized water management and waste reduction as key pillars of their strategy. The most concrete example is their internal water system.

They use a NORDAQ water filtration system in nearly all hotel rooms across their integrated resorts. This system has allowed them to avoid the use of 13.2 million single-use plastic (SUP) bottles. That's a clear, quantifiable reduction in plastic waste and a direct saving on procurement and disposal costs. They also focus on circular economy initiatives, such as expanding the recycling of playing cards and composting food waste at City of Dreams Manila.

Finance: Track the quarterly CapEx spending against the MOP 11.8 billion commitment by the end of the year.

The total CapEx for Macau in 2025 is anticipated to be about $290 million. This spending is a key part of their total MOP 11.8 billion (approximately US$1.5 billion) commitment to the Macau government over the 10-year concession period (2023-2032). The government will review the progress of these investments covering the 2023-2025 period, so hitting that quarterly spend target is crucial for concession compliance.