IAG AUGUST 2015 - page 11

In Focus
also amoment when gaming revenue, 83% ofMacau’s government
revenue in the first half of this year, continues todecline, andMacau
faces increased regional competition.
Although the current government aims tohandle the concession
expiration issue, Chief Executive Fernando Chui will leave office in
December 2019, fours months before the first expirations, Beijing
is likely to be more involved in both the selection of Mr Chui’s
successor and the concession issue. Even if the current six operators
are granted renewals, terms could be different and even unequal,
according to experts inMacau and beyond, some of whom asked to
comment anonymously.
Gaming concessions expire in 2020 for SJMHoldings andMGM
China and in 2022 for Galaxy Entertainment, Wynn Macau, Melco
CrownandSandsChina. TheMacaugovernment says itplans tobegin
talks on concessions with operators next year. Upon taking office
last December in the revamped cabinet for Chief Executive Fernando
Chui’s second five year term, Mr Leong said the government would
assessoperators’performance ingamingalongwith theircontribution
toeconomicdiversification throughnon-gamingofferings.
Following the December 1999 departure of Portugal’s colonial
administration, Macau’s first Chief Executive EdmundHo proposed
ending the casinomonopoly of Sociedade de Turismo de Diversoes
was tomakeMacau amore diverse tourist destination. Concession
expiry offers a chance toput teeth into that goal.
“The government’s aim has been amarket where gaming is one
of several attractions,much likeacruiseship,”WellsFargoSecurities
Senior Analyst Cameron McKnight says. “We think those licensees
who have contributed the most to diversification, and invested in
Macau’s future, are likely to be viewed most favorably. In practical
terms, we don’t know what that means, whether it’s the allocation
of gaming tables or development land, or different terms on which
licenses are renewed.” He notes that the authorities’ enthusiasm
for non-gaming investment extends to neighboring Hengqin island
in Guangdong Province, a joint development zone envisioned to
complement and support land-shortMacau.
Experts say it’s too early to speculate about what conditions
might be attached to new concessions. Increased tax or investment
requirements beyond gaming could be added and concession
Following theDecember1999departureof
Portugal’s colonial administration,Macau’s
ending the casinomonopolyofSociedadede
TurismodeDiversoesdeMacau (STDM)and
offeringnew concessions.MrHo’s stated
goalwas tomakeMacauamorediverse
offersa chance toput teeth into thatgoal.
Upon takingoffice lastDecember in the
revamped cabinet forChiefExecutive
FernandoChui’s secondfiveyear term,
MrLeong said thegovernmentwould
assessoperators’ performance in
gamingalongwith their contribution to
economicdiversification throughnon-
FernandoChui SaiOn
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