Opinion
MACAU Licences
In Macau’s Five-Year Development Plan – a package of policies and initiatives covering the period 2016 to 2020 and that was published in 2016 – the city’s government stated that Macau casino sector non-gaming revenue should account on average for at least nine per cent of all revenue generated by Macau operators by 2020. That target was met in 2015.
Nevertheless, he said that he had not heard of such a proposal before and did not see the Macau government being interested in implementing an alternative regulatory framework. Investment analyst Grant Govertsen of brokerage Union Gaming Securities Asia Ltd also said that the possibility of the Macau government adopting a new casino licencing scheme was not high.
“Naturally this concept [of licensing casinos individually] would be championed by service provider casinos as it would increase their cash flows (largely at the expense [of the current licence providers]) and increase the value of their assets exponentially. However, we continue to believe that a more likely scenario would be the potential addition of a seventh concession that would end up in the hands of a local group that may or may not include existing service provider casinos.”
Everything is speculation right now concerning the licences as the Macau government has overtly stated that this is exactly the position it wants before negotiations commence. Last year, Macau’s Secretary for Economy and Finance, Lionel Leong Vai Tac said that the government would be keeping its cards close to its chest in the run up to the expiry of the concessions of the six current Macau operators. Mr. Leong said
P90 NEWSWIRE / INTERACTIVE / MARKET DATA
the government needed to take into consideration the increase in competition in the casino industry across the region.
“We can’t forget that the gaming sector is predominant [in Macau’s economy], and to guarantee its sustainable development we need to pay close attention to international competition.” Te official stated that if the government were to announce too early the rules on the refreshment of the concessions, that would allow other jurisdictions to adjust their gaming policies accordingly, which he said could contribute to a “more severe” competition.
“Before we announce the new rules, we need to think about the appropriate time to do so, in order to guarantee the sustainable development of the [gaming] sector,” Mr Leong added.
In Macau’s Five-Year Development Plan – a package of policies and initiatives covering the period 2016 to 2020 and that was published in 2016 – the city’s government stated that Macau casino sector non-gaming revenue should account on average for at least nine per cent of all revenue generated by Macau operators by 2020. Tat target was met in 2015, five years ahead of the deadline, according to data compiled by the city’s Statistics and Census Service.
LIVING IN INTERESTING TIMES Control of the Macau market to date has thus far
meant table restrictions on gaming floors, visa restrictions, foreign currency limits and a huge clamp down on corruption.
Te Government’s long-term plan, however, remains unclear, and the exact method or regulation that finally turns Chinese capital outflows into isolationist expansion – part of the rising economic nationalism that’s also being championed in the US right now, is unknown, but the shift in terms of government intervention is making Macau a less attractive investment opportunity for foreign business.
Despite the fact that China is now considered to be a largely economically developed country, it is common to see protectionism in the developing world as countries strive to ring- fence their fledgling industries from the threat of globalisation. China is looking to take this a step further by not just protecting pre-existing industries, but creating new ones to replace foreign competitors, whether this be the formation of the largest gaming hub in the world or an attempt to create an internationally competitive football league, car industry, online shopping giant, etc. We don’t know what is going to happen during the forthcoming licensing process, but significantly, nor do the world’s largest gaming operators.
“What are China’s intentions for Macau’s concessionaire holders?” is an opinion piece contributed to G3 magazine by William Cammegh.
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