One of the biggest conundrums facing the government in managing the future of gaming in Macau is the calendar – and perhaps that explains why, despite some statements released in recent months, the government has said nothing.
The timing is problematic because it obliges the current Chief Executive to intervene (at least in the two licences expiring two years from now) when he intends to leave the portfolio to his successor. The term of office of the current Chief ends on 19 December 2019, while the first concessions expire just three months later. It does not pass through anyone who is the successor to make that decision.
To increase the difficulty level of the challenge, this Legislative Assembly will end in 2021 (i.e.) halfway through the expiry period for the licences granted to the three concessionaires and three sub-concessionaires.
Being a highly volatile subject, and with the exception of a two-year extension, consensus is the least it has been.
There are the most varied opinions, from those who argue that operators should know as soon as possible what awaits them to those who understand that the less Chui Sai On does the better.
In the opinion of Professor Ricardo Siu “it is better and more effective to have the public decisions on the progress of this particular industry under one Administrative authority, instead of part by the current CE and part by the new CE.”
So he does not think that “by aligning the expiration date of the gaming concession of two operators with the other four operators in 2022 is an attempt to postpone major decisions to the new Chief Executive from 2020,” as posed by Macau Business.
“Rather, the current CE and his team are seen working closely on the related issues to provide more flexibility and references for the new CE and his team to make better and consistent decisions for Macau’s casino gaming industries as a whole.”
The strange timetable does not disturb political decision-making only. As stated by local lawyer Bruno Beato Ascenção: “It is unlikely that any amendments to the Gaming Law will occur until the end of 2019.”
Which is why this barrister also advocates the extension of JSM and MGM concessions to 2022, saying: “This measure will grant enough time for the next Chief Executive to implement all the necessary changes to the current legal framework in order to allow greater flexibility in the negotiations and granting of future contracts regarding all current operators and thus shape the future of the Macau gaming industry.”
“It is unlikely that any amendments to the Gaming Law will occur until the end of 2019. This measure will grant enough time for the next Chief Executive to implement all the necessary changes to the current legal framework” (Bruno Beato Ascenção)
Mr. Ascensão reserves for the third Chief Executive the major decisions. “During the first two years of the next decade,” he maintains, “the next Chief Executive, in accordance with the Central Government’s policies, will decide upon who, how and when they will be able to undertake what is undoubtedly regarded as one of the most lucrative activities in the world: casino gaming in Macau.”
We have already heard the opinions of an academic and of a lawyer, and we have added the opinion of a market analyst. Grant Govertsen, of Union Gaming, understands that “we would not be surprised if it is the next government of Macau that ends the renewal process.”
In this context, one more question arises: are the first two licences extended for another two years with or without additional economic costs? In case of new requirements, a discussion with the concessionaires will have to be embarked upon.
It turns out that this negotiation should be led by the Secretary for the Economy, who supervises the gaming area. But what if Leonel Leong tended his resignation in order to run for Chui Sai On’s office (as Chui did with Edmund Ho)? Who will be at the table?
On the other side are the concerns of UMAC Professor Jorge Godinho, who, almost two years ago, observed: “We are in the final stages of life of the current concessions and the investment continues at a remarkable pace. There is, of course, a certain need for clarification of the long-term future of the market. Because the uncertainty is increasing as we approach the deadline and it is appropriate that this situation be clarified as soon as possible.”
A perspective shared by market analysts.
Ben Lee, of IGamix, argued also in 2016 (to the Portuguese language Plataforma newspaper) that “we must say already to operators who want to see their licences [expiring] between 2019 and 2020 renewed what the government’s vision of the shift to the mass market is . . . Macau is no longer sexy.”
For Lee “we cannot wait another three years. I know that’s the trend, but will the future Chief Executive really have anything to say? . . . When you take office it will take another year before you decide what to do.”
Three months to know
Unlikely as it may seem, the Macau Government managed to get to March 2018 without leaving a single clue as to what it intends to do.
Not an easy feat considering that this is the most important sector of the local economy – because great pressure is being exerted by the media, because there are listed companies (moving billions) and because in particular Leonel Leong has to sometimes speak about the subject.
To say what?
There it is: basically nothing.
“Before we announce the new rules, we need to think about the appropriate time to do so in order to guarantee the sustainable development of the [gaming] sector,” Mr. Leong said last November, adding: “We can’t forget that the gaming sector is predominant [in Macau’s economy] and to guarantee its sustainable development we need to pay close attention to international competition.”
In this context, the most important assertion turns out to be from Chui Sai On, when he told the press after his Policy Address for 2018 (also November): “The mid-term review for the gaming sector has already been done and we’ve consulted public opinion. We want to assure the healthy development of the gaming sector in correlation with the development of Macau as a tourism destination. As of now we’re not in the condition to release new measures” with the “middle of next [this]” year an “appropriate” time to reveal more information.
Three months, and counting, to know all.
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