New concessions tender starts today

Today the international public tender for the issuing of the new licenses to operate casinos in Macau has officially started and will take place until September 14, the Secretary for Administration and Justice (DSAJ), André Cheong, announced in a specially organized press conference yesterday at the government headquarters.

The conference was the first by the new Commission for Gaming Licenses Tender and also provided an opportunity for Cheong to announce that he had been elected as Committee chairman, while the Secretary for Economy and Finance, Lei Wai Nong, will be the Committee secretary.

In his initial speech, Cheong also said that the government is firm on the implementation of all the rules of the recently approved new gaming law so that the gaming industry can expand to include more non-gaming elements as well as expand its market sources into foreign markets “to reinforce the economy of Macau as well as to reinforce the position of Macau as a World Tourism and Leisure Centre,” the same official noted.

As Cheong reaffirmed to media inquiries, “non-gaming elements are not just restaurants or hotels, but include others forms of entertainment and events such as MICE (Meetings, Incentives, Conferences, and Exhibitions) events as well as performances and others,” adding, “in other regions, non-gaming elements have significant results [for] the revenue of the gaming concessionaires. We are not urging them to have these elements; we are now demanding those elements.”

According to the same official, the Commission will take into account the guidelines and goals set by the new gaming law, which aims to reinforce Corporate Social Responsibility in respect of the new concessionaires, including the creation of more job opportunities for resident workers as well as career promotions for those who had already been working within these companies for several years.

The public tender will run for a period of 48 days, more than the first tender back in 2001, when the application period was only 33 days, the official mentioned, advancing that it was taking into account difficulties related to the pandemic.

The Secretary for Administration and Justice also noted that many issues have become known from the 21 years of accelerated development in the sector, including the fact that the gaming industry has been supporting itself from one single source (the mainland), a fact that he classified as “not very healthy.”

Addressing questions about the goals of the government for the upcoming decade, Cheong said that government wants gaming operators to expand and open to foreign markets as well as perfect the demographic of their clientele, noting, “these are important elements that the bidders should pay attention to and emphasize in their proposals.”

Equal opportunities for old and new

To the many inquiries from the media, Cheong reaffirmed that both the current concessionaires as well as new players that might have an interest in running in the international tender will be evaluated in the same way and without any prejudice or favoritism towards the companies that hold the current concessions.

“This public tender is open to all interested who have the financial capacity and intention to invest in Macau. Foreign entities may also participate,” Cheong said, adding, “there will be a maximum of six concessionaires according to law, but this does not mean we will have six concessionaires at the end of the tender. Reputability and finance capacity as well as other elements including the operation of non-gaming activities are crucial. If they [the bidders] do not comply with these rules, we might not attribute all the licenses.”

Expansion only into foreign markets

One of the topics that gathered broad attention was the requirement that new concessions must attract new clientele from foreign markets instead of focusing on the Chinese internal market.

The rule, clearly part of the criteria for evaluating the new concessions, is not just a hassle for the concessionaires but also clashes with the current border restrictions, that forbid foreign visitors from entering Macau.

On the topic, Cheong said that such a rule applies for the period of the licensing, that is, 10 years counted from January 1, 2023, a time by which the government believes that Covid-19 will have subsided and there will be no more restrictions related to the pandemic.

“Of course, now we are being affected but the tender aims to enforce new licenses from January 1 [2023] to enter a new phase. This is a new direction to promote the sector starting next year. The epidemic will surely have passed by then. What the bidders must do is assume this compromise of expansion to foreign markets [at their tender proposals].”

Questioned about whether there was a contradiction between this idea of attracting visitors from abroad while Macau has been closed to this type of visitor for almost three years, Cheong said that he does not see any contradiction.

“The policy of [Covid-19] ‘zero cases’ in the community is to protect the population and is according to people’s desires. Of course, this limits the arrival of foreign visitors. But, as I mentioned, this is not only for this year but for the upcoming 10 years starting from next year. With the recovery of the tourism sector, I think the concessionaires will do all they can to get foreign clients,” he remarked.

Questioned on how to quantify the compliance of the casino concessions with the foreign attraction rule, Cheong said that such a ceiling will be defined clearly in an Administrative Regulation that the government is still producing.

“On the phase of evaluation of the bids, we will negotiate with the bidders and define the indicators to follow on that matter as well as the percentage of international clients. We will have a plan for that,” he said, explaining that in his view this is not necessary to be defined in advance and before the tender.