MACAU BUSINESS
“There will always be a role for junket operators, albeit it will probably look very different to what it used to look like. Probably smaller in volume and their customers and their funds will have to be squeaky clean”, Ben Lee anticipates while noting that “the advent of digital RMB will be part of that transformation”. In the thread, António Lobo Vilela believes that “the
number of junkets may shrink and its activity may drop, but they will not disappear”. At the end of the day, “ the junket industry will be reinvented”.
What’s next
As the public consultation ends on October 29, the next step for the Government is to draft a report on the consultation and then move ahead with a draft to be tabled to the Legislative Assembly for first reading deliberation. At this stage, questions remain over how the lawmaking process will be hooked up with the expiration of the current concessions and sub- concessions in June 2022 and the public tender. In the eyes of Mr Lobo Vilela, “time is short to conduct a public tender before the termination of the concession and sub-concession contracts”. On top of that “the pandemic crisis, the Covid-19 zero-policy followed by the Macau authorities, the economic downturn that is on the horizon, all together makes the opening of a tender the worst moment ever”, he underlines. While acknowledging the possibility of an extension of the current concessions due to insufficient time to complete the new tender”, Ben Lee is inclined to another scenario: “with the process finally underway, we could actually see the process completed by the first half of 2022”. This could be the case due to a combination of factors. On the one hand, Mr Lee states that there is a need for “new investment from the concessionaires to stimulate our economy, to emerge from the pandemic, particularly if they are directed towards non-gaming facilities”. On the other hand, “the development of Hengqin Island is now a national priority and, if incorporated into the terms of the new concession, will Macau then be able to fulfil its obligations”. Another source in the industry told Macau Business that another possibility could be under the new law an extension be granted with new strings attached, instead of the current model, whereby extensions are carried out without additional requirements. Whatever the case, Macau’s gaming industry is being encompassed in the wider picture related to national security. A report issued in August by the Legislative Assembly (AL) Land and Public Concessions Follow-up Committee stated that the development of the local gaming sector has implications related to the country’s national security and it is unlikely the current VIP room exploration model could be sustained under China’s penal legal framework. “Continuous capital outflows can and will harm the national economic interest of the People’s Republic of China”, Sonny Lo sums up.
28 NOVEMBER 2021
Gaming law revision –
Consultation Paper (Translated from original in Portuguese) Key quotes NUMBER OF CONCESSIONS
“It is proposed to proceed with the study and review of the number of concessions, as well as expressly stipulating in the law the prohibition of sub-concessions” “Restricting the number of concessions does not mean reducing the sector’s competitiveness; on the contrary, it aims to ensure a balance between the stability of the gaming market’s size and the liberalization of the sector”
CONCESSION PERIOD
“ (…) The imposition of an excessively long or inflexible concession period may cause a certain level of obstacle, probably leading concessionaires to be less proactive in improving their services to attract new customers”. “It is proposed that the concession period for the exploitation of games of chance in casino be revised”
PROFIT DISTRIBUTION
“It is suggested that the distribution of profits to shareholders carried out by the concessionaires - regardless of being in cash or in shares - cannot be done without fulfilling the specific requirements defined for this purpose and obtaining prior authorization from the Macau SAR Government”
GOVERNMENT DELEGATE “This [Decree-Law no. 13/92/M] would be translated in the appointment of Government delegates to extend the direct supervisory power of the Macao SAR Government over the concessionaires, providing it with greater capability in monitoring and controlling the daily operation and operational situation of the gaming operators”
GAMING LAW REVISION – AIMS
•Stipulate the direction of development of the gaming sector and its size
•Stipulate number of concessions •Stipulate concession period
•Strengthen supervision and mechanism for verifying the suitability of operators
•Strengthen supervision and mechanism for verifying the suitability of gaming promoters
•Introduction of Government delegates
•Stipulation of criminal responsibility and administrative offenses
•Define the non-gaming projects that concessionaires must develop
•Define reinforcement of workers’ guarantees •Define matters concerning social responsibility
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