Gaming Law | Gov’t considers awarding concessions based on ‘quality not quantity’
A report on the public consultation on the amendment to the gaming law has revealed that most participants “agree with the general direction of the consultation document,” considering the guidelines on the revision to the law as “correct.”
According to the report reviewed by the Times, those whose opinions were collected understood that that the revision of the law “will help to ensure the orderly development of the gaming sector.”
The public consultation report stated that, in terms of administration, a majority believe that there must be more than one deputy administrator who is a permanent resident of Macau to exercise this position, preferably with qualifications in the relevant areas. Some respondents suggested the percentage of share capital held by a managing director be increased from 20% to 50%, as well as requiring the director to stay in Macau for a certain period of time (such as 183 days, for example) in order to understand the Macau market and the operating situation of concessionaires and sub-concessionaires.
Others considered that the percentage of share capital held by a managing director should be increased in stages to 50% or higher. Other respondents pointed out that an increase in the percentage of share capital held by the managing director effectively ensures that the exploitation of games of chance is not used by international investors, safeguarding the interests of Macau and its government. This is expected to give the concessionaires and sub-concessionaires sufficient time to deal with the issues in question.
According to the report, to ensure the stability of the gaming market’s size and operation, as well as the sustainable, healthy and orderly development of the gaming sector, the government understands that in determining the number of concessions to be awarded, it is appropriate that the line of consideration be “quality” and not “quantity.”
A restriction on the number of concessions does not mean reducing the sector’s competitiveness in the market, but aims to ensure a balance between the stability of the gaming market and the liberalization of the sector, “allowing the government of the Macau SAR to attract companies with greater potential for development and sufficient financial capacity for the Macau gaming market, thus strengthening the competitiveness of the local tourism and gaming sectors in the international context,” the report added.
On September 14, the SAR government announced that there would be public consultation on the amendment to Law no. 16/2001, which commenced on September 15 and ran for 45 days.
Following the announcement, gaming stocks tumbled as much as USD18 billion, the worst day for casino operators ever recorded.
The city’s gaming operators and junkets immediately sought clarity in a 70-minute online meeting in which industry representatives and executives voiced full support for the idea that the 20-year-old gaming law should be updated.
During the 45-day consultation period, the government sought opinions on nine main aspects of the gaming law, namely: the number of gaming concessionaires; the duration of concessions; additional regulations regarding inspections; the increase of workers’ security; the reinforcement of verification mechanisms for concessionaires as well as gaming promoters and partners; the introduction of new delegates from the government; promotion of non-gaming projects; corporate social responsibility; and a new regime of both criminal and administrative responsibilities for the concessionaires.
Lei Wai Nong, Secretary for Economy and Finance, previously announced that concessionaires will be under tighter scrutiny from the government, which will have greater authority to verify the background of the staff hired by both the concessionaires and the entities who work with them.
With the lucrative casino licenses up for rebidding next year, the government aims to raise the general competitiveness of the sector amid a broad Beijing regulatory crackdown occurring in various sectors, from technology to real estate.
Beijing’s crackdown has already cut hundreds of billions of dollars off asset values.
Analysts have expressed uncertainty and have warned of risks, given that the fundamentals in Macau are already “murky and difficult to analyze incrementally.”
The high-profile arrest of junket king Alvin Chau has put the city on high alert for the potential direct and indirect repercussions — with analysts saying that the arrest also marks the end of the junket era.
The arrest also caused casino operators to shut down their VIP rooms.
The public consultation was supposed to comprise eight sessions, but was postponed three times due to pandemic control measures. The report cited a total of 359 respondents and 73 stakeholders.
