istorians may regard the past month as a watershed in the restructuring of the SAR’s economy, which is to take shape in the years to come. On September 5, the Communist Party of

China Central Committee and the State Council issued the much-expected Master Plan of the Development of the Guangdong-Macao In-depth Cooperation Zone in Hengqin. The blueprint sets ambitious targets to accomplish a new model of regional cooperation and to promote the diversification of Macau’s economy. Direct references to the gaming industry were unsurprisingly conspicuously absent from the document; however, as the goal for 2035 is that “promoting Macau’s adequate economic diversification will basically be realized”, it seemed clear to many observers that the Hengqin plan is aimed to pushing Macau effectively and finally away from too much reliance on the casino industry. Questions surfaced about the size and role of the gaming industry in Macau. Part of the answer was provided ten days later with the announcement of another much-anticipated key document: a consultation paper on the revision of the gaming law (Legal Framework for the Operations of Casino Games of Fortune).

The document provides an assessment of the

transformational impact of the liberalization of the gaming industry two decades ago and the staggering growth the city witnessed while also pointing out the social and economic imbalances resulting from this ‘miracle’.

(Over) reaction

While some of the proposed measures to beef control over the casino operators and gaming promoters had been, to some extent, foreseen, two proposals seem to have sent shivers down the spine of a number of investors: the introduction of the Government delegate to the gaming concessionaires and the distribution of dividends to shareholders subject to certain criteria and priori authorization from the Government. Within two days following the release of this consultation paper, the perceived increase in government control of future concessionaires led to a sell-off in gaming operators stock that erased more than US$19 billion in market value from Macau casino stocks. “Most of the Macau government’s announcement was

telegraphed in advance, so with few exceptions, it was not a surprise. On the whole, it was negative; but should it have warranted Macau’s gaming companies to lose a third of their value? Definitely not,” Alidad Tash, the managing director at 2nt8 Limited, a consultancy specializing in international casinos and integrated resorts, told Macau News Agency (MNA). Macao Polytechnic Institute gaming industry researcher Carlos Siu Lam also considered the level of investor pessimism to be “excessive”. By late September, a brokerage warned investors that “until the clarity on the next concession emerges” the city’s gaming sector “could stay un-investable”. In a note sent by JP Morgan Asia pacific analysts DS Kim, Amanda Cheng and Livy Lyu hint that such clarity is “unlikely in

BEN LEE Managing partner of IGamix

ALIDAD TASH Managing director at 2nt8 Limited

ANTÓNIO LOBO VILELA Former adviser to the

Secretary for Economy and Finance


Gaming industry researcher Macao Polytechnic Institute

SONNY LO Political scientist and author of several books on Macau and Greater China

NOVEMBER 2021 19

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