MACAU BUSINESS
Four months later, two major Las Vegas casino-resorts players set their foothold in Macau: Wynn, with a concession, and Venetian (Sands), firstly as a partner of Galaxy and later on operating as the first sub-concession. In the ensuing years, another two foreign gaming giants joined the local market via partnership arrangements also as sub-concessionaires: MGM (US) and Crown (Australia). Two decades on, Jorge Oliveira stresses: “Macau is now far
more scrutinized by foreign regulators, gaming investment analysts, securities market regulators, and China’s central authorities”.
Beijing’s oversight
have to be extended. In late August, a junket representative – Lam Kai Kong, director of the General Association of Administrators and Promoters for the Macau Gaming Industry – called on the Government to extend the current concessions for an “appropriate time”. The law does allow an extension of the concessions for up to five years, on an exceptional basis. However, there is no official indication or suggestion that the
Government is planning to move on with the postponement of the gaming concession bidding.
Higher stakes 20 years on
This public tender carries different features from the historic one held nearly two decades ago, which broke the 40-year-long monopoly hitherto held by Stanley Ho’s STDM. “A lot has changed from the last tender”, says Jorge Oliveira, former Commissioner for the Legal Affairs of the Macau Gaming Commission that oversaw the whole process. Oliveira, who played a pivotal role back then and throughout the first decade following the 1999 handover, notes that “this time there is a lot more critical mass in the local gaming sector”. António Lobo Vilela, who worked under Oliveira as a senior legal advisor in the SAR’s Gaming Commission, also recalls “the lack of critical mass at the time”, when local authorities were launching the international public tender. In the early years right after the December 1999 handover,
there was still a great deal of uncertainly with regards to the prospects for the city’s core industry. The first hopeful indication came with the feedback resulting from the invitation sent by the local government for an Expression of Interest (EOI) for casino concessions in Macau, with the aim of testing the waters. Surprisingly, “there were 22 entities responding, and amongst them some of the big guns of the casino industry”, highlights Lobo Vilela, who currently serves as senior advisor to the Secretary for Economy and Finance.
22 OCTOBER 2020
Oliveira’s remarks echo an evolution of Beijing’s oversight on Macau affairs, specifically over the local gaming industry. The SAR witnessed a casino boom over the past two decades, with a significant role being played by foreign-owned gambling operators, namely from the United States. This has elevated the supervision of Macau affairs in this respect to a foreign policy and to a national security level, taking into account the ramifications related to cross-border crime such as money laundering and loan-sharking activities. The situation can be seen as a double-edged sword, as highlighted in Sonny Lo’s new book “Casino Capitalism, Society and Politics in China’s Macau”. The Hong Kong-based political scientist notes that “if the industry is run in such a way as to allow money-laundering activities, it will undermine the PRC’s national security”. On the other hand, “a healthy casino-led capitalist economy must bring about political and social stability”, and at the end of the day Beijing emphasizes the need to maintain national security, socio-political stability, and the welfare of its citizens”. A closer cooperation and twine between mainland and local authorities is therefore expected, with the SAR’s police and the gambling watchdog being better equipped and having razor-sharp teeth instead of being toothless tigers. The steps towards a tighter regulatory environment, both for casino operators and the junkets, are set to be sped up.
The US-China factor
In addition, the preparation for the public tender occurs against the backdrop of an ever-growing tension international geopolitical landscape marred by the US-China rivalry, whereas twenty years ago Beijing had just joined the World Trade Organization and Sino-American economic relations were flourishing. “It is riskier to handle both legal and political terms”, Oliveira anticipates. At this juncture, if all goes according to the expected timeline,
Macau’s incoming public tender will take place in the midst of what some regards as a “New Cold War” and shortly after the key US presidential election this coming November. Alidad Tash, a Macau-based gaming strategist and former Vice President of casino operators Melco Resorts and The Venetian Macao, asserts that “the US elections will play a major role”, and predicts that, in the case where Trump does get re-elected, US-China tensions are set to worsen. “This would exert more pressure on the three US operators”, as the three US casino companies operating in town – Sands, Wynn and MGM – could become “legitimate targets in this new cold war”, particularly if the US Administration continues to ban Chinese companies, adds Tash, managing
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