Special Report – A litmus test

The Government says it does not want to postpone the public tender for the allocation of new gaming concessions, but this will be a race against time, a test of skills and power. 

MB December 2020 Special Report | Ho Iat Seng – Year 1

Last April, JP Morgan Securities (Asia Pacific) Ltd indicated that the revision of Macau’s gaming law might not be completed until 2022, saying it “wouldn’t be surprised” to see the casino rights retender process “postponed by a year or so versus the current expiry of June 2022.” 

What is the relevance of this assumption by JP Morgan experts, given that in Macau it is normal for the initially scheduled deadline to be postponed? 

First of all, there is the fact that we are talking about an act, the public tender, with numerous implications for the life of Macau. And then, there is the fact that this can be seen as a first big test for Ho Iat Seng’s governance. 

If the Chief Executive wants to do things differently from the past, he has to win this ‘battle’, mainly because several times, all through 2020, the Government has said it had no plans to delay the launch of a fresh public retender process for gaming. 

For this to happen, the Government, as Chui Sai On had already said, must change the Law that regulates local gaming (Law No. 16 / 2001). 

In the last few months, the Government has said that it has plans to have the law amendment process completed by next year, but according to what was revealed in the last Policy Address, this gaming law revision will happen only by 4Q 2021.   

It is precisely this calendar that makes JP Morgan Securities and other observers sceptical, as the city will see the Legislative election in September, and the whole law-making process must be completed by August.  

Before the Secretary for Economy and Finance ensured that there are no plans to postpone the public tender and confirmed that the law revision will be presented in 2021, Chief Executive Ho Iat Seng indicated that the gaming law revision could be submitted for public consultation still within the year. 

That is why the management of this portfolio will be a decisive test for the Chief Executive’s governance – more and more voices are talking about an extension of the current concessions so that the Government gains time and positions itself more favourably when it opens the tender. 

Busy with the management of COVID-19, Ho Iat Seng has been avoiding talking about gaming. 

But in the rare interventions it has had, the current EC has left its mark. 

On the one hand, it made the historic decision to close all casinos for two weeks, with Macau being the first place to do so and having been followed by other jurisdictions – it was probably the first of several measures to combat the pandemic that earned him praise from different sectors, including some that do not usually praise him. 

On the other hand, he did not hesitate to criticize the unavailability of some concessionaires to assign hotels for quarantine. There was immediately the idea that the government would put the issue of social responsibility in the new tender, something that Ho Iat Seng neither confirmed nor denied: “Social responsibility is social responsibility. Concession renewal is concession renewal. Don’t mix these up. However, I won’t rule out this possibility.”  

And, importantly, he replaced the Director of the Gaming Inspection and Coordination Bureau by choosing someone (Adriano Marques Ho) with a very different profile from Paulo Martins Chan. 

 Ieong, Meng U 

“The China-US relationship factor” 

“For me, it seems that at least the China-US relationship would have a certain weight in renewing the gambling license which is out of the Macau government control. How to renew the gambling concessions is not a decision which can solely be taken by the Macau government. Especially now that it is believed that the gambling licenses related to the US companies may be one of the ‘cards’ in play in the US-China new cold war. In that sense, we can say Macau government is ‘buying’ time as it can’t fully decide what is the next step. 

Sonny Lo 

“Government buys some time” 

“Clearly the government buys some time and it will be triggering the tendering process perhaps next year. But ideally the government should have a document to be published to point out some criteria of the gaming concessions’ continuation or new application, or ideally public consultation through e-forums should be held earlier so that the members of the public will be engaged. Again, like the Master plan, gaming concessions and tendering should have some elements of public participation and engagement prior to the formal tendering processes, but again the Macau bureaucracy appears to be stuck in old style of traditional and passive governance. Not proactive and aggressive enough. 

José Alvarez 

“Only one place Chinese will be allowed to enjoy gaming” 

“It would be ingenuous to think they aren’t already working on it. In any case, I think H.I.S. has avoided disclosing too much information to avoid compromising their future position in coping with the rapid changes to the market brought about by the current pandemic and the geopolitical situation. One thing is clear – Macau will continue to be the only place where Chinese are allowed to gamble (aside from the HK Jockey) and they are still the biggest spenders in this regard. This means, the Government won’t likely be shy on its demands as a result of the pandemic. 

Read more | Special Report – Master plan: The major first policy test