A decade to ‘change the image of Macau,’ gov’t proposes

It has been confirmed that the local government is trying to reduce casino activities to irrelevance or something merely residual through diversification of the economy with alternatives to the gaming sector.

The Secretary for Economy and Finance, Lei Wai Nong, expressed this idea at the Legislative Assembly on Wednesday, which he attended for a Q&A session with the lawmakers on the Policy Address for 2023 (LAG23).

Replying to lawmakers’ inquiries about the gaming industry and its prospective new era in Macau, Lei said, “the gaming industry is essential but is also the one thing undermining diversification.” He added, “this is why we need to do the 1+4 [new economic model that aims to develop four other industries in parallel with gaming]. On the new concessions [to be granted soon], we have made it very clear that we need to develop the non-gaming sector.”

Explaining for the first time the government’s philosophy for the next 10-year gaming concessions, Lei said, “we need to change the image of Macau [as a gambling destination].” He added, “these next 10 years will be very important for Macau to be able to attract other [than casino] types of visitors. We can’t do this online, we need to do it offline, on-site, people must come to see shows, participate in events, go shopping, and many other activities.”

Although this idea has previously been recommended by several analysts, this is the first time the local government has spoken publicly about reducing the gaming industry’s importance in the local economy to figures potentially much lower than analysts and academics initially forecasted.

The Secretary also revealed that the central government’s long-expressed idea of transforming Macau into a “World Centre of Tourism and Leisure” does not include gaming, at least not as Macau’s predominant activity. It is expected the gaming industry will be gradually reduced.

“In the first 20 years [of gaming liberalization] we have been focusing on developing the demand for tourists to visit Macau. In the next 10 years, the focus will be on developing all non-gaming activities. This is the way to create the World Centre of Tourism and Leisure in Macau. Otherwise, there is only one source of tourism, and it will be very hard to compete with neighboring cities and regions,” Lei said while adding, “besides the casinos, tourists must be able to enjoy other elements.”

The casino concessionaires, starting January 1, 2023, must also have a bigger role “helping the community economy,” Lei said, noting that “this is the only way we can have a healthy [gaming] sector.”

“Cotai is not the only district that needs to be developed. The other districts also need to be developed,” the Secretary said. He also mentioned that Macau has a long history of over 400 years and that the government aims to revive this historical Macau status in the next 10 years through the new gaming concessions.

11 non-gaming elements not addressed in detail

Lei’s comments were mostly directed at an inquiry from lawmaker Ma Io Fong who had directly questioned the Secretary on an alleged list of “11 non-gaming elements” to be included in the new gaming concessions.

The Secretary dodged the question. He preferred to speak in more general terms about the orientation of industry. However, according to a report by public radio station TDM Radio, the list exists. Among the listed tasks are the creation of a major art museum, an annual plan for shows and conventions, the creation of open-air venues to host concerts and other stage shows as well as art displays and exhibitions.

According to the same source, the creation of thematic international-level performances as well as maritime tours is also included, as are skating rings and other items.

Lei’s more revealing comments at the AL disclosed that negotiations between the government and the seven bidders on the international tender for the gaming concessions concluded last Tuesday. The Committee analyzing the proposals set last Monday as the deadline for submissions of the bidders’ final proposals.

Next in the process will be the Committee’s decision about the attribution of provisional concessions.

According to a previous report from the same radio station, the government wanted the investment plans by the new concessionaires to be around MOP100 billion but the same source reported that Galaxy and Venetian had reached an agreement for an undisclosed figure that is likely higher than MOP50 billion. Other bidders would have presented identical figures – or even higher – in their last proposal. This is one of the main issues on the negotiation table between the bidders and the government who wanted the investment plans to be of a higher value.

The Committee’s role is to present a final report that analyzes and prioritizes the proposals that bring more advantages to Macau. The Chief Executive (CE) makes the final decision on which bidders will be granted a concession.

According to the rules, the bidders must be informed of the outcome within 15 days of the CE making the decision.

Analysts point to the date of December 20 (Macau’s handover anniversary) as the tentative deadline for a final decision to be publicly announced.