A local professor researching the Macau gaming industry believes the Macau SAR government is not eager to start formal discussions and negotiations with gaming operators over amendments to the gaming law while the global COVID-19 pandemic continues because its bargaining power may be weakened.
The casino licenses of all six concessionaires are due to expire in June 2022, but Chief Executive Ho Iat Seng revealed during this week’s policy address that changes to the gaming law would not be confirmed until the second half of 2021, most likely in Q4. He added that the government would have “relevant mechanisms” in place to handle any potential delays to the re-tendering of licenses this may cause.
According to Macao Polytechnic Institute Professor, Dr Zhonglu Zeng, these so-called “relevant mechanisms” would “definitely” involve extensions of the current concession agreements, although the extension would not be “too long.”
Dr Zeng also suggested the possible delay is mainly due to the impact of COVID-19, as the government wants to be better placed when negotiations with gaming concessionaires begin.
“It is much more difficult to start discussions and negotiations or to reach practical agreements with gaming operators as well as investors during the COVID-19 period,” he said. “The situation for the government is not particularly favorable compared with normal times. The government may be able to propose more suitable conditions and requirements in normal times, but right now they might struggle to gain any positive responses from gaming operators.
“Uncertainties have increased, so as a result gaming operators might not want to give certain promises for the post COVID-19 period.”
The SAR government has so far offered little information about what amendments to Macau’s gaming law or re-tendering process, but Dr Zeng believes the government will look to tighten its monitoring and management of gaming operations.
Developing more diversified elements will almost certainly be another stipulation. “The economy will be harsh in the post-COVID 19 period while mainland Chinese authorities combat Chinese citizens gambling overseas, and this will force gaming operators to develop more non-gaming elements in the future,” he said.