Inside Asian Gaming

INSIDE ASIAN GAMING | April 2010 4 Editorial Inside Asian Gaming is published by Must Read Publications Ltd 8J Ed. Comercial Si Toi 619 Avenida da Praia Grande Macau Tel: (853) 2832 9980 For subscription enquiries, please email subs@asgam.com For advertising enquiries, please email ads@asgam.com or call: (853) 6646 0795 www.asgam.com Inside Asian Gaming is an official media partner of: http://www.gamingstandards.com Michael Grimes We crave your feedback. Please email your comments tomichael@asgam.com Publisher Kareem Jalal Director João Costeira Varela Editor Michael Grimes Business Development Manager Domingos Abecasis Contributors Desmond Lam, Steve Karoul I. Nelson Rose, Richard Marcus Shenée Tuck, James J. Hodl Andrew MacDonald William R. Eadington Graphic Designer Brenda Chao Photography Ike The Brangelina Effect The relationship between foreign casino operators and the Macau government looks pretty similar to the famously tempestuous relationship between the Hollywood stars of yesteryear, Richard Burton and ElizabethTaylor (or themore contemporary pairing of Brad Pitt and Angelina Jolie). They can’t live with each other, but they can’t live without each other. When commercial interests are at stake, hypocrisy is necessarily the watchword. That’s especially the case in the politically sensitive gaming industry. Governments are always ‘sincere’ and outside investors are always ‘partners’. Those without a commercial axe to grind can be a little more candid in their analysis. They don’t pretend that the matching of Las Vegas and China is a marriage made entirely in heaven. It doesn’t matter how many orchids get pinned on how many executive lapels at government-industry get-togethers. It doesn’t matter how many lion dances are performed at how many property openings, nor how much steamed eel with pigeon egg is eaten at banquets, nor how many smiles and warm handshakes are exchanged during photo opportunities. At the heart of the relationship between the foreign owned gaming operators and the local authorities, there appears at times to be a mutual incomprehension of the other side’s position. Who could blame the operators if they felt that billions of US dollars in infrastructure investment should reasonably buy them the right to lobby the government hard when their commercial interests are perceived to be at risk? Who could blame the Macau government if it felt it had the right to assert its sovereign power over the direction and character of the local gaming industry? At issue here is not so much who may be ‘right’ and who may be ‘wrong’, but in what context and what format any differences of opinion or direction should be aired. At the moment, it appears the regulation and direction of the Macau gaming market is not so much a partnership as force majeure , or ‘handbags at dawn’to use a rather more earthy term coined by rugby commentators to describe on field flare ups between players. If it gets to the stage where one side or the other feels it has to use brinkmanship in order to communicate its message, then something must be seriously wrong with the existing channels of communication. Perhaps a little more transparency might help. And by that we don’t mean a trade association meeting behind closed doors with the government. Nor do we mean deals done privately with the results emerging miraculously like smoke out of a Vatican chimney when a new pope is elected by a conclave of cardinals. A more transparent process would, in our view, actually protect the interests of the government and the operators by heading off any inclination toward high handedness in either direction. If the government, on occasions, feels aggrieved in its dealings with the industry, it ought perhaps to bear in mind that the managers of casino operators are only doing what the investors pay them to do—that is aggressively pursue and protect the companies’ commercial interests. If one set of managers doesn’t do it, the investors will simply hire another lot who will. Singapore appears to handle its relationship with its casino operators more successfully. This isn’t necessarily because it has more transparency in the process, but arguably because it has been very clear up front about what it expects from its investors. Neither side tries megaphone diplomacy or brinkmanship. Everyone knows it will never work. Nature hates a vacuum. Something will always move to fill up an empty space. That’s especially the case in business and in politics. During the era of Portuguese administration, Macau appears to have had a relatively laid back ‘hands off’ approach to regulation of its gaming industry. Old habits die hard. But if a driver occasionally dozes off at the wheel of a car, it hardly helps to wake up with a start and then massively overcorrect the steering. It’s better to stay awake and alert at all times, deciding on the route and speed you want to go, rather than allowing your passengers to decide on the ultimate destination.