MACAU BUSINESS
“[Gaming is] like a very rich uncle that nobody loves too much but everybody loves the money he brings,”
economist José I. Duarte illustrated “The last thing the Macau government wants would be the
destabilisation of the sector with great changes,” Mr. Duarte responded. “I would expect the Chinese operators, evoking the nationalistic cards to put pressure on the non-locals to go away, but it would require [us to be in] the disturbing times to see the reveral of the current situation.” The chance of the U.S. operators in Macau losing their
“Gaming is blamed for several ills, but at the same time,
it’s the source that will allow us to solve those ills.” In addition, Mr. Tash, the 2NT8 managing director,
pointed out the consultation document did not specifically address how satellite casinos — the properties operated and promoted by a third party under a gaming license of the city’s six gaming operators — will be handled in the future. According to DICJ, there are about 20 satellite casinos out of 41 casinos in the city. “We have too many of them… and that number should be
cut down significantly,” he said. “I’m not saying every single satellite casino should go out. I’m talking about the little ones that are purely casinos — they are exactly the opposite of what Macau wants.” Addressing the satellite casinos as the “complex and
historical issue”, Mr. Proença, the MdME lawyer, noted some of them have made contributions to the community. “The consultation document said more than once about the principle of ‘quality over quantity’ — we’ve been reading it as referring to the number of concessionaires but it could also refer to the number of casinos around town,” he said.
China-U.S. tensions
The “MBtv/FRC Debates” also discussed how the geopolitics, namely the tensions between China and the United States, might impact the future of the local gaming sector, given three of the six existing operators — Sands China Ltd, MGM China Holdings and Wynn Macau Ltd — are backed by the U.S. capital. Some observers have warned the licenses of the U.S. operators might be on the line over the deteriorating relationship between the world’s two largest economies.
“Providing clarifications on some of the proposed changes will “ease
concerns in the community” professor Carlos Siu
18 DECEMBER 2021
licenses is “significantly lower” now with Joe Biden replacing Donald Trump as the U.S. President because the administration led by the former has less hostile move against China, Mr. Tash stated. “If something breaks out in the South China Sea,... if there
is too much noise going on, China has every intention to use every single weapon in its arsenal — and every last bullet to fight,” he warned. “It depends on how bad the tensions get, and if they do get bad, unfortunately, the American companies, at least one of them, will take the fall.” In case of one of the existing operators losing its license, the gaming consultant stated the government would likely “force or encourage” other operators to buy shares of the one exiting the market at “a reasonable price” to ensure stability.
Strategic ambiguity
The panel also shared insights on 21 Oct about the possible duration of the licenses, with the government hinting at the likelihood of shortening the period from 20 years in the consultation paper. Some in the seminar highlighted a 10-year license might be enough for the operators to make money and for the authorities to have more control over the development of the industry, while some underscored the importance of a longer concession period for the operators to pledge investments. With just about seven months to go before the lapse of the
current gaming licenses and the fact that the amendments to the gaming law have yet been finalised, some analysts in the “MBtv/FRC Debates” panel believe the authorities could still rush through the process, while some dispute the existing licenses would likely be extended for a certain period of time before a new round of public tender is ready. “It’s probably too late to have things ready and it’s not wise to rush things,” said Mr. Duarte. Referring to the current economic turmoil caused by the
Covid-19 pandemic as a main reason for the government not to launch the new tender process hastily, Mr. Duarte said: “The player that has most of the cards — which is the government — will benefit from strategic ambiguity, although it will be pressured by the others to clarify. It will probably keep the situation as less clear as possible until it has a clear idea of how to get out of these difficult conditions.”
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