Inside Asian Gaming

INSIDE ASIAN GAMING | June 2008 12 One could argue that Macau was always going to be at a disadvantage compared to Singapore. That city state has a large and professional civil service educated to international standards, with armies of workers measuring everything from the number of pedestrians on its pavements to the number and type of tropical plants in its public gardens. There is a case for arguing Singapore may actually be over-administered, but a bit of joined up civil government normally helps more than it hinders. Macau had a population of 446,700 in 2003—the year prior to the opening of the first properties from new casino operators following the liberalisation of the gaming industry. Between 1996 and 2003, the city’s population growth had averaged less than 1% year-on-year. As more foreign workers were imported to staff the booming casino and tourism sectors, population growth reached 3.6% in 2004, 4.7% in 2005, over 6% in 2006 and 4.8% in 2007, with the population standing at 538,100 at the end of last year. With a string of mega resorts set to open in the city over the next two years, it doesn’t take a genius to work out you might just need more housing, more public transport and better roads. These are perfectly predictable needs. Yet Macau’s answer to one of these issues—housing—was to tighten the rules on non-residents purchasing property, rather than to attack the problem from the supply end. When one adds to this the planning logjam created by the arrest, trial and imprisonment of the former Secretary of Public Works Ao Man Long, it paints a pretty sorry picture. In most other sophisticated cities, Mr Ao probably wouldn’t have got a job as a clerk, let alone become the head of a big spending government department. There was nothing in theory to stop Macau hiring in the necessary administrative expertise to execute best practice and train a new generation of public servants (Why the Portuguese administration didn’t bequeath such a system to Macau would take a separate article to detail). Macau certainly had enough cash to buy in administrative talent, given that it was sitting on a budget surplus of 33.21 billion patacas (US$4.15 billion) from 2007 alone and is on the doorstep of Hong Kong and Singapore, two Chinese-speaking communities producing good quality public servants by the bushel. Doth protest Jorge Oliveira, a Portuguese-born lawyer, was one of the Europeans who stayed behind in Macau after the handover to China in 1999. He is Commissioner for Legal Affairs for the Macau Gaming Commission and was one of the masterminds behind Macau’s casino liberalisation in 2002. He felt it necessary recently to state publicly that Beijing hadn’t interfered in the awarding of Macau’s casino licences. To be fair to Mr Oliveira, he was being questioned under oath in a Nevada court hearing at the time regarding a success fee claim against Las Vegas Sands Corp, brought by Hong Kong businessman Richard Suen. The fact he had to say it at all speaks volumes about Macau’s lack of political self-confidence. Divide and rule Macau’s lack of real sovereign power can sometimes work in favour of casino investors. If, as a casino operator, you divide your hosts, you may also be able to rule over them in terms of achieving your business objectives. An example of this is the constant lobbying that goes on behind the scenes appealing for an exemption from a rule here or a relaxation of a condition there. While lobbying is a perfectly legitimate way for a company to pursue its business interests, there’s always a danger that unless final adjudications are made in public, it leaves both sides open to accusations of cronyism regardless of whether there is any foundation to the claim. An example is when Galaxy Entertainment Group got hopping mad a few years ago because it felt it had paid too much for its StarWorld site on the Macau peninsula. It claimed Wynn Macau had received special treatment by the government in the acquisition of its site, right next door to StarWorld. It would be naïve and foolish to claim special case lobbying doesn’t happen between government and business in the United States or the United Kingdom too, but it seems in Macau it’s been elevated to an art form. People Power Singapore is much richer in human capital than Macau Cover Story