Special Report – China’s influence “will be huge”

Are US-based concessionaires right to be concerned about the ‘cold war’ climate between the U.S. and China, or has the situation improved since Trump left office?

MB June 2021 Special Report | Gaming: The road to June 26, 2022

It is known today that the intervention of the Central Government of the PRC in the public tender of 2001 was minimal: Beijing told Edmund Ho that it wanted three licenses, and that being the case it still remains to be seen whether the mainland did so under pressure from Stanley Ho, who at the time put several contingencies in place, afraid that STDM would not be guaranteed one of the concessions.

Next time will be different, believes Jorge Costa Oliveira, former Commissioner for Legal Affairs at the Macau Gaming Commission.

“It will be huge. The influence of the central authorities in China is already very evident in Macau today; it’s hard to imagine it will be absent for such an important decision,” says the man who oversaw the process in 2001.

Mr Oliveira, now Partner & CEO of JCO Consultancy, also believes it “will depend on the Macau government’s capacity to create critical mass and take the lead. A high level of autonomy does not exist solely because it is enshrined in a legal document; it exists if the local institutions demonstrate the ability to handle local affairs efficiently and if the local elites are willing to fight for it in a responsible manner.”

In this context, one of the most sensitive topics results from the relationship between China and the United States, with three of the current six operators coming from Las Vegas.

The truth is that a scenario that seemed complicated for North American matrix operators has recently changed: in a short time, Steve Wynn ceased to lead Wynn, Adelson died and Trump is no longer president of the US.

Ben Lee, from IGamiX Management & Consulting Ltd, has stated several times that the sum of these factors could have an effect on the re-tendering.

Mr Lee believes that “things have returned to normal after the departure of all those casino moguls and President no.45. The chances of retaining the gaming concessions will have improved for the US companies.”

However, Ben Lee stresses to Macau Business that “as we have seen since, the new US regime has maintained if not increased their rigorous approach to their relationship with China vis-a-vis Hong Kong, which probably means that China’s views on this foreign presence in Macau are unlikely to have improved.”

China will take advantage of the re-tendering “to correct an imbalance that had slipped in.” – Ben Lee

For this Macau-based gaming consultant, beyond “making a stand,” China will take advantage of the re-tendering “to correct an imbalance that had slipped in.”

On this topic, Jorge Costa Oliveira is even more unambiguous: “If I were a concessionaire with roots in the United States, I would be concerned.”

“China has so far understood that foreign companies, namely US-based ones, have been useful for the development of Macau as a relevant regional and world leisure centre. But one has to wonder if the US’s recent policy of blacklisting scores of Chinese companies under different rationales won’t produce, sooner or later, some kind of retaliatory effect,” he tells Macau Business.

Priscilla Roberts, Associate Professor at City University of Macau, is another expert not envisioning significant changes in the geopolitical context.

Ms Roberts, a specialist in US foreign affairs and politics, stated last January that “it’s quite possible that American casinos will no longer be as welcome in Macau.”

Speaking at an event hosted by the France Macau Chamber of Commerce titled “America´s New President: A Turning Point for US/China Relations?”, Professor Roberts suggested China could use the re-tendering of Macau casino licenses “to deliver a slap on the wrist to the United States without really getting the Biden administration too upset about what’s happening to the Adelsons and the Wynns.”

Cross-border gambling

In January of this year, China’s Ministry of Culture and Tourism announced that it would extend its travel blacklist of overseas gambling jurisdictions or countries that promote gambling tourism for Chinese nationals.

One month later, China’s Ministry of Public Security issued a statement urging criminal suspects in cross-border gambling to “surrender” and focused on overseas gambling groups promoting gambling during the Chinese New Year.

Then an amendment to China’s criminal law enforced on March 1 determined that anyone who “organises” mainland Chinese for the purpose of “overseas” gambling will be deemed to have committed a criminal act.

Finally, last April, the Chinese Minister of Public Security, Zhao Kezhi, stated that China must take the strongest measures to strictly control and resolutely eradicate the conditions for cross-border gambling.

On this side of the border, it is still unclear what the real implications might be of these new rules criminalising the facilitation of “cross-border gambling”, not knowing for example whether Macau is included in the so-called “outside-the-borders” definition.

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