Legislative Assembly | Davis Fong acknowledges role in gaming license renewal

Davis Fong

Newly appointed lawmaker Davis Fong has acknowledged that he is likely to play a key advisory role in the upcoming gaming concessionaire negotiations.

Speaking on the sidelines of the Sands China Responsible Gaming Team Training Program last week, Fong said that Lionel Leong, the Secretary for Economy and Finance, has already proposed several options to the government concerning possible terms for the new licenses.

The gaming scholar said he would offer his advice and expertise on whichever approach is pursued.

“It’s up to the government – and the political climate at the time – to choose which option to adopt,” he said.

“Whatever the government adopts, I will provide my expertise and try my best to give my scientific view based on my research [background].”

A scholar in commercial gaming and integrated resort management, Fong currently heads the University of Macau’s Institute for the Study of Commercial Gaming.

Last month, he became one of seven lawmakers appointed to the Legislative Assembly by the city’s Chief Executive, Chui Sai On, to act as the collective voice of the executive within the legislative branch of government.

The latest legislative term will end in 2021, halfway through the expiry period for the licenses granted to the three concessionaires and three sub-concessionaires. MGM and SJM’s licenses will expire in 2020, while those of Sands, Galaxy, Wynn and Melco Resorts will last until 2022.

At a minimum, a blueprint for the new license terms will be established by the end of this legislative term.

“2020 is quite a critical year for Macau, so I am expecting the government will initiate some actions to open the bid,” said Fong.

The new lawmaker is not the only member of the Legislative Assembly with a role to play in the discussion. Lawmakers Angela Leong and Zheng Anting also represent significant gaming interests in the legislature and will inevitably exert influence over the license renewal terms.

The casino industry is responsible for an estimated 85 percent of the city’s GDP and the employment of tens of thousands of residents, making it the most important element in Macau’s socio-economic fabric.

However, the terms and details of the license negotiations remain as speculation.

Analysts suspect that political considerations will be made with respect to the decision. These considerations may include support for MSAR government-led initiatives and the scope of gaming operators’ contribution to the city’s economic diversification and development  as a world center for tourism and leisure.

The licenses will not renew automatically in 2020 and 2022, but they can be extended for a maximum of five years, if a decision from the government has not been reached. After that, a new public tender must be launched.

However, lawmakers and the government may still be a year or two away from even the commencement of formal negotiations.

In the more immediate term, Davis Fong suspects that the effectiveness of the city’s disaster response infrastructure is a more pressing item on lawmakers’ agenda.

“After the typhoon, local citizens have high expectations over how to improve the local disaster response infrastructure. I am waiting for the policy address released by the government,” he said, adding that he expects Typhoon Hato and its related issues to dominate the address.