Insight
MACAU MdME Lawyers
Rui Pinto Proenca, Managing Partner, MdME
Rui Pinto Proença is Managing Partner of MdME Lawyers and head of the firm’s Corporate and M&A practice. He specializes in mergers and acquisitions and also focuses on the gaming sector where he regularly acts for gaming companies in Macau and across Asia-Pacific region assisting government in emerging markets developing their gaming policies and regulatory frameworks. Rui is the global chair of the Lex Mundi Gaming Solution, a network of law firms covering over 25 gaming jurisdictions around the world and a member of the Board of Trustees of the IAGA.
www.mdme.com.mo rpp@mdme.com.mo
Macau Gaming Concessions: A case for licence extensions
The six contracts at the epicentre of this discussion are no less than the very legal instruments that allowed for the growth of the Macau gaming industry in the past 20 years. From a total GGR of US$2.9bn (in 2002) the sector now represents an unimaginable US$36.5Bn per annum (in 2019), accounting for more than 75 per cent of the total tax revenue of this relatively tiny region of China.
When this article goes to print, we will be approximately 20 months out from the expiration of the existing concession (and sub-concession) contracts between the Macau government and the current casino operators. Tese are SJM, MGM, Melco, Wynn, Galaxy and Sands
Twenty months may seem like plenty of time to address what is, in its essence, a licensing issue. However, as recent global experience has demonstrated, a lot may change rapidly so, for all the stakeholders involved, this deadline looms just around the corner…
In fact, the six contracts that are at the epicentre of this discussion are no less than the very legal instruments that allowed for the growth of the Macau gaming industry in the past 20 years. From a total GGR of US$2.9bn (in 2002) the sector now represents an unimaginable US$36.5bn per annum (in 2019), accounting for more than 75 per cent of the total tax revenue of this relatively tiny region of China.
Tese contracts have not only shaped the operators into the gaming powerhouses they are today, they have also changed the face (and the faith) of Macau. What is at stake then is not simply the future of each
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of the companies involved but rather the prosperity of Macau and its people. And, as most industry veterans would recognise, both require a delicate balance that has been carefully crafted over the past two decades.
WHAT ARE THESE PIVOTAL DOCUMENTS?
In short, a concession contract is a civil law instrument used in the Portuguese legal system as the preferred way for the government to outsource services considered essential to the public (the provision of water and electricity, waste management, etc.). It is also used to allow the commercial operation of activities that, although not being of direct public interest, can be as profitable as they are socially costly. Casino gaming is the latter.
For these reasons, the operation of games of chance for profit is an activity reserved by law to the Macau Government; it may only be pursued by private
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