Inside Asian Gaming

January 2011 | INSIDE ASIAN GAMING 17 Macau Policy official confided tohis colleagues:“Our policy shall be to evade any definite answer to their requests while at the same time maintaining a peaceful demeanour.” The problem is that Western traders in Asia don’t always—looked at froman Eastern perspective—play by the ‘rules’ of the game and allow their Eastern hosts to maintain a ‘peaceful demeanour’. Sometimes the Westerners shout andwave their arms about. That’s fine if you have a gunboat moored nearby in the bay, but less helpful if you’re armed only with a contract and a sense of your own rightness. Westerners, it seems, can’t resist the temptation to winkle out and then call out apparent inconsistencies in the approach of their hosts. In Western culture, the ultimate smooth talker is the Devil himself, just waiting to charm and ensnare the unwary with warm words and wicked intent. In the East, smooth talking is not only polite but also morally neutral. Easterners are more interested in the final destination than the conversation they had on the way. As China’s reforming leader Deng Xiaoping was reported as saying when asked in a roundabout way whether market based reforms to the Chinese economy were a betrayal of the communist revolution: “Do not care if the cat is black or white, what matters is it catches mice”. A practical example of this East-meets-West difference in action is a recent episode involving Angela Leong, freshly installed as managing director of SJM Holdings in place of her 89-year-old husband, Dr Stanley Ho. Ms Leong announced a new resort project on Cotai independent of SJM and that would be a casino-free theme park focusing on sport and leisure. It was reported in the local media that Macau Theme Park and Resort Ltd had acquired a 200,000 square meter site next to the Macao Dome for the MOP10.4 billion (US$1.3 billion) scheme. There was some suggestion in media reports that the scheme had found favour with the government because it fitted in with the latter’s plan for diversifying the local tourism industry. The really interesting part of the saga came a fortnight later, when Dr Ambrose So, Chief Executive of SJM, told journalists that SJM was talking to Ms Leong about a possible ‘synergy’ between her casino-less project and SJM’s projected plans for a (presumably casino-centric) property on land next door. Some Western commentators saw this as subterfuge. Many locals and the more experienced China hands in the Western community simply regarded SJM and Ms Leong’s approach as good tactics. In other words, it doesn’t matter what colour the cat is, or what you call the cat, as long as it catches the tourist mice. Given how successful the new generation of Macau’s land- based casinos are proving to be, it’s important not to overstate the potential downside in terms of the cultural clash sometimes found between the foreign operators and the Macau government. In early January, Macau’s gaming regulator, the Gaming Inspection and Coordination Bureau (DICJ), reported gross revenues for games of fortune during 2010 amounted to MOP188.34 billion (US$23.51 billion), a 58% rise year on year from 2009. Casino gaming is a political talking point all over the world. What governments give— either in terms of issuing formal licences or in terms of de facto permission via non- intervention (as happens sometimes with online casino services)—governments can also take away. We’ve seen that with the Unlawful Internet Gaming Enforcement Act in the United States. We’ve also seen it with the crackdown on casinos in Russia—where casinos were moved out of major cities to four remote locations in the country—and in attempts by individual European Union states to limit expansion of land-based and online gaming services aimed at their citizens by exploiting get-out clauses in European law as it relates to open markets and fair competition. No right-thinking person would deny Macau’s sovereign right to decide the direction of its casino industry. The main challenge for casino managers in Macau and analysts of the local market is to try and strip away any issues relating to cultural misunderstandings and look beneath at the language everyone understands—the bottom line. To that end, an interesting question is whether there’s an obvious strategy underlying government decisions on gaming regulation and policy or whether the government is taking an essentially ad hoc, reactive position as and when particular issues arise. Twin track There is some evidence to suggest it’s Angela Leong—pragmatic approach SJM’s Dr Ambrose So, seeking ‘synergy’ with theme park plan