To cap or not to cap

Some clatter has been made recently about the number of table games for the several properties to open in the short term in the Cotai district, with concessionaires and sub-concessionaires requesting an amount and government not approving in full the requested number of tables. The 3% cap on the increase in table games was put on the table by the former Secretary for Economy, Mr. Francis Tam, in 2011, for a period of 10 years starting from 2013. Well, if my maths are correct 2023 is one year beyond the term of the concessions and derived sub-concessions that are currently in force… One shall not discuss whether such a cap is valid or not, as there is a discretionary power of the government to impose such policies and, consequently, caps. The gaming operators that requested more tables for their new properties already knew well in advance that they would not be granted a number of tables exceeding the cap. Public data reveals that at the end of 2014 there were 5,711 gaming tables. According to this public data – and not counting Galaxy Phase II, and The Venetian’s Parisian, for which figures have not been disclosed – the properties opening in the coming years will account for 2,100 gaming tables to be requested (Wynn Palace – 500; MGM Cotai 500; SJM’s Lisboa Palace – 700; Melco’s Macau Studio City – 400). This is almost half more than what existed at the end of 2014, and way beyond any aggregate cap of 3% annually. Notwithstanding all discussions in place and whether it is fair or not to have a cap, at the present time it might be useful to revisit the issue, taking into consideration the following factors: How is the premium for each table paid by the concessionaire? Is it per table per year or by day that the table is open to the public? What are the concrete factors that precipitated the policy to grant more tables to one gaming operator that is higher than the other in face of the principle of equality of all operators? Would the correction (I personally do not see any crisis) the Macau gaming industry is experiencing suggest that the cap be set aside or suspended for a certain period? This should be all assessed, probably in the so called mid-term analysis currently underway. The investments made by the concessionaires and sub-concessionaires under the concession contracts have long been fulfilled. There is no obligation by the government to approve the number of tables or to adapt policies to the will of the operators. Furthermore, a short visit to most of the casino areas will serve to prove that some tables are closed most of the time. This being the case, why should the government approve more tables? If the tables are closed for business it is because they are not so necessary for conducting business. We are in a crucial moment regarding the future of the gaming industry in Macau. Times of correction are the best in which to judge the future which, against all pessimistic odds, will be bright. It is in the hands of the government and of the operators to continue on this track and to keep Macau at the centre of world gaming.