MACAU BUSINESS
continue to have legal gaming, but it may also be extended to other places in China, including Hainan
“ – JITENDRA TULCIDAS ”
invested heavily in the island, like Mr. Zeng Xianyun, in the hope that the government will eventually allow gaming there. And although no official indication or announcement on legalising casinos is expected anytime soon, several players have been actively mounting a case around [the idea] with the drumbeat calling for legal gaming on the island growing louder.” Mr. Tulcidas, the former Director of Investment
Promotion in the Macau Trade and Investment Promotion Institute (IPIM) during the Portuguese Administration shares with the readers of Macau Business a different perspective from the one that has been made public, namely through the reports of the research agencies: while Sanford C. Bernstein Ltd., for instance, states that the plans to develop the island of Hainan as an international tourism destination would affect the non-gaming tourism plans of Hengqin Island, although not of Macau. Tulcidas reminds us that “one must bear in mind the fact that by 2049 the Macau SAR will be no more, becoming then an integral part of China. Therefore, what the recent moves from the Central Chinese authorities may indicate is a strategy to start to plan ahead to set up the required legal framework for China to have legal gaming when that happens. By then, Macau will continue to have legal gaming, but it may also be extended to other places in China, including Hainan.” While the plan might be long term that does not mean that the moves do not start right away – and Bloomberg’s February news dispatch, reporting that the Chinese authorities were considering turning Hainan into a gaming hub to rival Macau will have been just one more step. It is now public knowledge that the Hainan
Government had commissioned a group of scholars to study how gaming tourism could be developed on the island, as well as how to legalise gambling in China.
And when, in March of this year, one of the elements of this group (Professor Pei Guangyi of the School of Economics and Management at Hainan Normal University), published a paper arguing that China should legalise gaming to reduce capital outflows through foreign casinos Macau actually perceived the signs. According to Professor Pei: “Since one cannot stop
Chinese people from gambling, it is a better solution to make sure that foreign or private capital does not overly profit from it”. Jitendra Tulcidas understands that “this statement
may signal what may be at the core of the frenzy that overtook the issue of gambling in Hainan as
20 JULY 2018
opposed to the current gambling environment in Macau, where the bulk of casino earnings go to international operators of local units, like Las Vegas Sands, MGM, Wynn Resorts, etc.” While knowing that the Macau Government will
reveal the strategy for the new gaming concessions in the coming months, “statements like Professor Pei’s in this context are a clear sign of what may be at stake.”
Four international airports Regardless, efforts continue, publicly and privately, to make Hainan a tourism capital of the world. In the front line stands the already mentioned
hotel magnate Zeng Xianyun, the Chairman of Phoenix Island, an artificial archipelago off Hainan’s southeastern shore that has a cruise ship terminal, luxury hotels, apartments, shopping malls, a theme park and entertainment areas.
By then [2049], Macau will NEWS IN BRIEF
Not a bad business Gross gaming revenue in Macau amounted to MOP25.48 billion (US$3.15 billion) in May, up 12.1 per cent when compared to the same month last year when reported MOP22.74 billion. According to the Gaming Inspection and Co-ordination Bureau (DICJ), the amount recorded last month represents a 0.92 per cent decrease from that recorded the previous month, April. Accumulated gross gaming
revenue for the first five months of the year has reached MOP127.72 billion, an increase of 20.1 per cent when compared to the same period last year or MOP106.38 billion. Macau gross gaming revenue have posted a 21 per cent increase year-on-year in the first quarter, with VIP revenue increasing 21 per cent and revenue driven by mass consumers growing 20 per cent during this period.
Only one million international visitors C
hina decided to turn Hainan Island into Mainland China’s biggest Special Economic Zone in 1988. Today, Hainan has been dubbed ‘the
Hawaii of China’ for its beach resorts, forested and mountainous interior and tropical climate. Jitendra Tulcidas highlights the “massive
tourist infrastructure projects that have been developed in the province during the last decade or so, with the government pouring billions of dollars into new highways, high speed railways, airports, cruise terminals and other projects, attracting prominent players in the luxury market like Mandarin Oriental, Ritz-Carlton, Hilton, Westin, Four Seasons, St. Regis, etc. World class integrated resorts (like the above-mentioned Phoenix Island or the more recent Atlantis Sanya) have been built and are in full operation.” But not everything is well. “Despite the huge investments made, the number of visitors from abroad is still disappointing. In 2017, of a total of 67 million people who visited Hainan only one million were international visitors. Bali, which is a fifth of the size of Hainan with less developed infrastructure, received over five
million international visitors in 2016,” states Jitendra Tulcidas, who is currently an international consultant on energy and mining mergers and acquisitions, but remains focused on what is happening in Hainan.
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