MACAU BUSINESS By Paolo A. Azevedo By José Carlos Matias*


Jeju – the new Singapore


regulatory A new


Exclusive Macau Business / Macau News Agency


Jeju will be as big as Singapore in terms of Gross Gaming Revenue, predicts Lawrence Teo. The Chief Operations Officer and Vice President of Dream Tower, the tallest Integrated Resort under construction on the Korean destination island, explains to Macau Business why Lotte Tour decided to enter the casino business and create a landmark. All bets are on making the casino resort the crown of the tourism jewel the company has been dominating for four decades


T


he gaming bill received first-reading green light. While a panel of legislators is starting to review the amendment proposal, analysts stress how the new bill signals a whole new legal and regulatory environment. The draft sets the direction for the


industry, however clarification is needed on practical enforcement matters, experts say. The gaming industry had been under a certain level of anxiety since the Government unveiled the consultation paper on the gaming law amendment process on September 14 and the ensuing 45-day public consultation period. The document weighed in heavily with tighter rules and supervision over casino operators junkets, with an aim of spurring economic diversification. Back then, some industry insiders and analysts pointed to proposals that raised eyebrows: the introduction of a government delegate to the concessionaires and a vetting mechanism for the distribution of dividends. Casino shares reacted with an unprecedented sell off, which erased US$19 billion in combined market value. The December 23 final report on the consultation, regarding the amendment to Law No. 16/2001 named “Legal Framework for the Operations of Casino Games of Fortune”, summed up the opinions collected, hinted at less-than-20-year-concessions, and kept a certain size of the industry. Following the Executive Council’s held a press conference on January 14 announcing that they had completed the review of


M 18 OCTOBER 2017 20 MARCH 2022


“The provision stating that qualified shareholders and directors are jointly liable for all debts of the concessionaire, including the gaming chips in circulation (…) attempts against the very nature of a company, which is to limit the liability of


their shareholders” António Lobo Vilela


the gaming law amendment bill, shares of Macau casino companies rallied. The details provided by André Cheong, Executive Council spokesperson and Secretary for Administration and Justice, gave investors relief from the uncertainty around the direction of Macau’s gaming industry. The Government’s moves, such as the decision to drop two


controversial proposals like introducing a Government delegate to the concessionaires and a prior authorization before distribution of dividends to shareholders, alongside setting a maximum of six concessions (and the expected ban on sub concessions), and keeping the current 35-per cent direct tax rate on gross gaming revenue in the future law, were well received by analysts and investors. This ended up offsetting another key proposed change: cutting in half the maximum length of the licenses to 10 years, with the possibility of a three-year extension under exceptional circumstances. In the eyes of some analysts, the six concession capping makes it likely that the “Big Six” – the current three concessionaires and three sub-concessionaires – will stay in the game.


Operators’ support


acau Business – From Lotte World, a major recreational complex [with the world’s largest indoor theme park, in Seoul] to an integrated resort with casino in Jeju. A different beast. A


natural evolution? Lawrence Teo – Business is the same. But building


a landmark. M. B. – The group [Lotte] has created other landmarks in different types of business. Why would this be different? L. T. – Yes, Lotte Group has already created


Following the Executive Council’s press conference, all six Macau casino operators – MGM China, Sands China, Wynn Macau, SJM Resorts, Melco Resorts & Entertainment and Galaxy Entertainment Group – issued statements welcoming and backing the Government’s announcement. The actual version of the law amendment proposal was


submitted to the Legislative Assembly and published in the legislature’s website on January 18, with a number of additional details not mentioned in the previous announcement by the Government.


One of the most noteworthy regards an interim assessment mechanism.


downtown Seoul and Lotte Super Tower. We’re trying The draft bill “Amendment to Law No. 16/2001” states in


article 22 – concerning the duties to be observed by the casino operators – that they will need to undergo a review by the regulator to analyze their compliance with the obligations spelled out in their concession contracts. Should the outcome of the review indicate a lack of proactivity or failure to comply with the contract terms, the operators will need to improve the relevant situation within a deadline set by the Secretary for Economy and Finance, the same article states. Another novelty introduced in the draft amendment concerns the conditions under which a gaming concession can be


to do the Dream Tower in Jeju. Lotte here is being just a family company; we’re a different company [Lotte Tour]. It’s not going to be [just] the tallest and the largest building in Jeju, that’s just the hardware. We say that a landmark should be the most visited destination, where tourists will go to eat, shop and maybe [visit] our observation deck. A must-visit point destination. Because of the hardware, and also the software.


M. B. – What are the main goals that you definitely


Gaming concessionaires will be subject to a review by the Gaming Inspection and Coordination Bureau (DICJ) every three years.


want to achieve with this Integrated Resort (IR)? L. T. – Number one EBIDTA on IR in Korea. There’s


landscape


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