Macau govt commissions gaming licences study

The Macau government has commissioned a study on the possible development of the city’s gaming sector in the period between 2020 and 2030, said on Tuesday a member of an advisory body to the government, according to the Chinese-language channel of public broadcaster Radio Macau.

According to the media outlet, Macau-based gaming scholar Davis Fong Ka Chio said the study aimed better to understand what should be the scale of Macau’s gaming industry in that period, in order to contribute to the diversification of the city’s economy. The study would also look into how many gaming licences should be issued once the concessions of the six current Macau operators expire, added Mr Fong.

He was speaking to reporters after a closed-door meeting of the city’s Economic Development Committee. Mr Fong heads its policy research unit and is also a legislator and an associate professor at the University of Macau.

Mr Fong was quoted as saying that the new study would serve as reference point for the government in relation to the possible refreshment of the gaming rights of the current six Macau operators. Such concessions are due to end on various dates in either 2020 or 2022. The respective licences of SJM Holdings Ltd and MGM China Holdings Ltd are set to expire first, in 2020.

Mr Fong stated that the study would be divided into two parts: the first would focus on local residents’ perception of the gaming industry; and the second on ways to achieve what the government commonly refers to as the “healthy” development of Macau’s gaming industry, and how that can be achieved amid competition from neighbouring gaming jurisdictions.

He noted that the University of Macau was one of the institutions chosen to carry out the study. The full report should be completed before the third quarter 2018 and would be submitted to the Economic Development Committee for discussion, Mr Fong added.

Macau’s Chief Executive, Fernando Chui Sai On, said in November that mid-2018 would be an “appropriate” time to provide more details regarding any extension or refreshment of gaming rights for Macau’s current gaming concessions and sub-concessions.

According to Macau’s gaming law, it would be possible for the territory’s government to renew the existing contracts – in exceptional situations – for a maximum period of five years. But once a gaming concession contract expires, the new concession would have to be granted via a public tender.

Gaming licences

Jorge Godinho, a visiting professor at the University of Macau, where he teaches gaming law and anti-money laundering law, said on Monday that the extension of the current concessions “should be avoided”.

“In 2021, there should be a new public tender, for a higher number of [gaming] concessions. That occasion should also be used to introduce a few other reforms,” said Mr Godinho, speaking at the Tenth International Conference on the Legal Reforms of Macau in the Global Context – Gaming Law, held at the University of Macau.

“Only exceptional situations  … can justify an extension [of the existing gaming licences] … From a political and economic standpoint, the exceptional extension of the current concessions is not desirable,” he added.

During his presentation, Mr Godinho suggested that SJM Holdings’s concession “should be extended for two more years, until 2022”. Such extension would also apply to MGM China’s licence. That would put all six Macau licensees on broadly the same finishing line for the current era of gaming concessions.

Launching a new public tender would be “the most desirable scenario,” said the scholar, adding that it would also be an “excellent opportunity” to introduce some amendments to the existing legal framework.

“The current [gaming] concessionaires and sub-concessionaires should not be concerned about a new tender for the concessions, unless the number of concessions offered was fewer than six, which we don’t believe would happen,” said Mr Godinho.

The scholar additionally said that the government should increase the number of gaming concessions, so that some of the city’s major gaming promoters – who currently operate casinos via third-party agreements – “have a way to become independent concessionaires”.

“All of the operators must be selected and have a direct relationship only with the government. Moreover, it would lead to the collection of higher taxes,” explained Mr Godinho.