Love me (public) tender
The extension of the six contracts – a kind of public tender to ‘renew’ the current six operators (with or without additional economic costs) – and the pure public tender, open to all. The cards are on the table, with all to play for.
T
he fact that the government has so far not pronounced upon what it intends to do feeds the possibility of various scenarios. Some will probably be more credible than
others but – in this context – all is possible. As Professor Ricardo Siu, a gaming expert,
tells us: “Many factors like the changes in the performance of the industry/market, external environment and public interests may alter the likelihood of different scenarios happening” over the next two years. For simplicity, and as explained earlier, we
assume that the government is going to set the end of all concessions at 2022 – that is, extend the concessions of SJM and MGM for another two years. If this does not happen, the process, whatever it is, will have to be enacted twice. With this framework, we move to the list of scenarios Macau is already discussing and will continue to do more and more:
1. Extension First, if it is true that Macau speaks volumes about the renewal of the current licences it is equally true that the law does not contemplate this scenario. For this to really happen there would have to be a profound change in the law. The closest approximation of a renewal, in the light of the legal diploma in force, is the possibility of extending it to a maximum of five years once the 20-year term has expired.
18 APRIL 2018 One of the most voiced opinions in Macau
in these matters is uttered by Professor Jorge Godinho, who argues, for example, that a new public tender with “five or less” candidates “will not happen” and that a public tender with six candidates “would not be worth it if the purpose is just to maintain the same operators who could just see their concessions extended.” The extension, however, raises some problems. First the five-year limit. What investments can be made if it is known
that everything ends in five years (and then there will be an open public tender)? Will it eventually become a measure that will stagnate the local market and the economy of the MSAR?
On the other hand, by spending the trump
of extension, the government will no longer be able to use it again if it is really necessary in the event of some crisis (and that is the spirit of the law in force).
2. A public tender benefiting the six operators (with new requirements)
The scenario of opening a competition that – in some way – benefits the current six operators attracts the most consensus, according to the opinions gathered by Macau Business. “Why change the system, if it works?” asks UMAC Professor Desmond Lam. “For whatever
“The law clearly provides that a public tender
must be conducted in order to award licences for the operation of casino games of chance in Macau (Article 8),” believes Changbin Wang. “Although this rule was mainly directed at the public tender conducted in 2001-2002, it remains a good law.” Thus, if the concession system continues to be applied to the gaming industry after the expiry of the current concession period “public bidding seems inevitable unless the law is amended” concludes the professor of Gaming Law and Regulation at the Gaming Teaching & Research Centre (Macau
criticisms that we may have about the operators, they (I mean all of them) have done a great job in moving Macau forward since liberalisation,” he explains to our magazine. Ricardo Siu shares this point of view: given
the “very good job of modern development, especially the development supporting the mass market development in Macau,” he believes that all six operators’ concessions will be renewed when the tender happens.
“
Why change the system if it works?
DESMOND LAM ”
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