Must the new Gaming Law be passed by 26 June? And must the new concessions be signed by 31 December? Despite that being the prevailing wisdom, the answer to both questions is, “Apparently not.”
As we all know, the gaming contracts of the six concessionaires will expire at midnight at the end of 26 June this year, and the government has stated the six concessions will be extended until 31 December. The President of the Macau Legislative Assembly Macau, Kou Hoi In, mentioned earlier this year that he hoped the new gaming law would be passed before 26 June, and it is widely said that the new gaming law must be passed on 26 June. But why? Is it possible to pass it later?
In fact, 26 June is not a deadline at all. The new gaming law can definitely be passed later.
The current Law No. 16/2001, formally the Legal Framework for the Operations of Casino Games of Fortune but commonly known as the “Macau gaming law” does not have an expiration date. The only thing which expires is the right to operate gaming, which is held by the six concessionaires. All six concessionaires have applied to the government to extend their gaming rights until December 31 and are now waiting for approval.
If the new law is not passed on June 26, the six concessionaires can still continue to operate their gaming business under the prevailing law. There is no need to rush through the law before 26 June.
So why has 26 June been apparently set as a deadline for the passage of the new Gaming Law?
When asked by IAG on Friday, the Chairman of the Second Standing Committee of the Macau Legislative Assembly, Andrew Chan Chak Mo, said it was a matter of “time.”
He pointed out that after the passage of the new Gaming Law, there are many transitional provisions to be dealt with, and the process of open bidding for gambling licenses must be carried out, which he said can only be implemented after the passage of the new Gaming Law – presumably so that bidders can understand the legal requirements under which they would be operating in the future.
We have more time
According to Article 13 of the current Gaming Law, the Chief Executive may grant one or more extensions of the casino gaming concessions, for a total of no more than five years. This means that the six concessionaires could see their concessions extended until 2023, or even 2024. This is subject to the approval of the Macau Chief Executive.
Under a maximum extension of five years regime, Galaxy, Melco, Wynn Macau and Sands China still have at least four years to run, while MGM and SJM have at least two years.
However, according to the current government proposals, the new Gaming Law will be passed before 26 June, and the six concessionaires will only be renewed until 31 December, so there is only half a year to carry out the upcoming open tender for the new casino gaming concessions, subsequent contractual negotiations and final execution of the concession contracts – obviously a very tight schedule.
The Macau government has enough time to deal with the gaming law and to conduct the open tender. But truth be told the pressure to comply with the 26 June and 31 December dates they have set themselves is merely self-imposed, so that the “new” regime for the gaming industry in Macau will be in place by 1 January next year.
The upcoming gaming tender will influence the livelihoods of more than 600,000 people, but there are a few months for bidders around the world to prepare. Is that enough time? We have some doubts.