Report | Casinos spooked by land plot reversion
Casino operators are worried about what the recent land reversion cases in Macau will portend for their upcoming license renewals in 2020.
According to Reuters, the government’s seizure of over 100 plots of lands from developers, on the grounds of their non- or under-utilization, has spooked casino executives. The reversion of the land plots proceeded despite protests from the developers, concerned residents and some city legislators.
The news agency has reported that some operators are concerned that the MSAR government might take a tougher stance in the unprecedented negotiations leading up to the license expiry dates between 2020 and 2022.
“It’s really a warning sign that the government is not backing down for the casino concessions,” one senior casino executive, who wished to remain anonymous, told Reuters. “Nobody really knows what is going to happen.”
“Just because you have a licence now doesn’t mean you will have one in the future,” another casino executive told Reuters. “They are setting our expectations that some operators may not continue.”
Five of Macau’s six casino operators had previously refused to comment on the issue.
Melco, breaking the silence, told Reuters that it hoped it would be able to continue its casino business in Macau, highlighting its connection to the city. Lawrence Ho, the son of casino magnate Stanley Ho, is Melco’s chief executive officer and chairman.
The government has rebuked the suggestion that the confiscations over the past four years are connected to the casino license renewals, and maintains that there is no intention to revise the Land Law.
The local authorities have justified the confiscations by saying that developers have been sitting idle instead of developing the plots as agreed in their contacts. They say that the tough stance will reduce corruption and ensure that land – in scarce supply in Macau – will be used for their intended purpose.
However, developers have accused government bureaucracy of stifling development plans, citing burdersome regulations and unresponsiveness from the related government departments.
In the meantime, casino operators are taking pre-emptive action to win favor from the local government. This reportedly includes a drive to hire more local workers and widely-publicized procurement campaigns to support the city’s small and medium-sized businesses.
But the upcoming license renewals have also meant caution among the operators and, according to Reuters, have also resulted in shorter-term contracts negotiated for new casino executives.
“It’s all very sensitive at the moment,” said another casino executive. “We are just trying to understand what the government wants.” DB
