Without a hint of surprise, the government announced the extension of SJM and MGM gambling concessions. All the operators will be ‘aligned’ and in a similar position for future negotiations. Any other decision would have complicated the government’s own position and be inconvenient in terms of the broader political calendar.
Further, this is neatly fairer for the candidates. If the extension was not granted, the two ‘early’ concessionaires could claim to be at a disadvantage. They would work as scouts for the rest of the industry, testing the waters and identifying obstacles for the benefit of those coming later, who would have more time and opportunities to fine-tune their plans.
Of course, as in all ‘parallel’ negotiations, all candidates will be attentive and may benefit from the leaks and insights from other concurrent negotiations. But in this case, only two would be taking risks. The circumstances that led to the present ‘misalignment’ were possibly unavoidable, almost 20 years ago, but its persistence would not make real sense for any of the parties.
On its side, the government may deal with the new era starting in 2022 from a better vantage point. It will have more time to polish its own objectives and to sort out the approach to the negotiating table. And will be able to keep its ‘hand’ closed for longer, while the various interests at play jockey for a position at the starting line. Otherwise, it would be forced to disclose more than it might wish at this point.
And, last but not the least, the announcement for coming tender conditions and timing will fall on next Chief Executive, who will deal with and lead the process – which is appropriate, and one could not expect otherwise.
A few hints for the future negotiations, however, came already out. New concessions will be more ‘expensive.’ How much is a reasonable increase is in the eye of the beholder; yet, given the evolution of the sector, the current concession fees seem undoubtedly cheap. For fairness, though, those amounts cannot be pondered without reference to other benefits, financial or otherwise, the operators provide for the region.
Besides, they will be asked to join the voluntary retirement fund and create a guarantee for labor credits. Even without further details, these are positive and mostly uncontentious matters. But they are not at the heart of the case; the actual game has yet to start.
