If the latest figures of online GGR are to be taken seriously, it is not wise to disregard the effects of competition from this segment going forward. Adding to the uncertainty, there are the risks arising from the global geopolitical landscape. This high-stakes game, of unforeseeable consequences, may impose on the local government decisions that may be contrary to the best interests of Macau and its people.
(ii) by reasons external to the Government– if the macroeconomic and socio-political context in existence at the relevant time would advise against a change to the status quo.
One could argue that the current public health emergency is a textbook example of an external and extenuating circumstance that could warrant an extension of the contracts. However, Macau’s Chief Executive – the top government official who holds the power to grant it – has denied it.
In a rare glimpse of clarity over the government’s thoughts on the topic, the CE has revealed that the government will proceed with opening a public tender, that it has no plans to extend the current terms beyond 2022 and that there will be no tax reduction. It also added that a public consultation on the topic will be launched by the end of the year.
Tese statements were produced in April this year – P102 NEWSWIRE / INTERACTIVE / MARKET DATA
just after the peak of the pandemic in China – during the government’s annual policy address. Now that the situation seems to have stabilised in China (by far Macau’s largest market) is there a case to revisit the CE’s predications? In my opinion, there is.
Firstly, the pandemic is far from being under control globally and there are no assurances that China will not be affected again.
Secondly, we are now more aware of its long-lasting consequences – social, economic, and political. Tis is particularly relevant for the casino-resort industry, which is highly dependent on the circulation of large numbers of people, social interaction and availability of disposable income.
Tirdly, the operators’ ability (or willingness) to invest – and thus to meet the government’s expectations as to their obligations under new contracts – is no doubt tampered by months of burning through cash reserves
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